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Full text of "Sealed FBI affidavit supporting search of California State Sen. Ronald Calderon’s offices"

AFFIDAVIT 
I, l^^-^^ being duly sworn, hereby state as 

follows : 
I. INTRODUCTION 

1. I am a Special Agent ("SA") with the Federal Bureau of 
Investigation ("FBI"), and have been so employed for 
approximately seven years. I am currently assigned to the 
Public Corruption Squad in the Los Angeles Division, where I 
specialize in the investigation of corrupt government officials, 
During my employment with the FBI, I have participated in 
investigations involving public corruption, bribery, fraud 
against the government, bank and loan fraud, wire fraud, mail 
fraud, social security fraud, and money laundering. Many of 
these investigations have involved the use of informants and 



and ha 1 



cooperating witnesses, and have required financial analysis. I 
have also participated in the execution of numerous search and 
arrest warrants. I have conducted physical surveillance and 
have monitored electronic surveillance. In addition, I have 
attended numerous training sessions on the investigation of 
public corruption and other white collar crimes, including the 
collection of evidence. I have been informed that RONALD 

CALDERON, as a California State Senator, would have received 

i 

training and training materials on ethics and what his 
obligations are regarding gifts , bribes , gratuities , travel 



expenses, conflicts of interest, and use of campaign funds. I 
have also been informed that RONALD CALDERON would have been 
required to file financial disclosures, such as a Statement of 
Economic Interest (Form 700) , with the Fair Political Practices 
Commission and/or the State of California while in office, 

2. This affidavit is made in support of an application 
for a search warrant for the Capitol Office of California State 
Senator Ronald Calderon, which is located in Room 5066 of the 
California State Capitol, a building facing 10 th Street between 
"L" Street and "N" Street in Sacramento, California, 95814 (the 
"SUBJECT PREMISES")/ a more detailed description of which is 
provided in Attachment A. The requested search warrant for the 
SUBJECT PREMISES includes RONALD CALDERON' s personal: office and 



taff, and an^ 



the offices of his staff, and any common areas. For the reasons 
set forth below, I respectfully submit there is probable cause 
to believe that the SUBJECT PREMISES contains evidence, 
contraband, fruits , or instrumentalities of criminal violations 
of 18 U.S.C. §§ 371 (Conspiracy), 666 (Bribery Concerning 
Programs Receiving Federal Funds) , 1341 (Mail Fraud) , 1343 (Wire 
Fraud) , 1346 (Honest Services Fraud) , and 1951 (Extortion Under 
Color of Official Right) (collectively, "the Subject Offenses"). 

3. The facts set forth in this affidavit are based upon my 
personal observations, my training and experience, and 



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information obtained from other agents and witnesses. This 
affidavit is intended to show merely that there is sufficient 
probable cause for the requested search warrant and does not 
purport to set forth all of my knowledge of or investigation 
into this matter. 

4. The conversations referenced in this affidavit were 
often quite lengthy and transcripts are still only in draft 
form. This is because, in large part, of the number of 
recordings and the speed with which the underlying investigation 
has moved forward. Therefore, while references in this 
affidavit to recorded conversations describe the substance of 
what was said, these descriptions are based on drafts of the 



transcripts of these recorded conversations. 
II. SUMMARY OF PROBABLE CAUSE 



•obable c< 



5. There is probable cause to believe that RONALD 
CALDERON, a California State Senator, has committed the Subject 
Offenses by accepting approximately $60,000 in bribes from an 
undercover FBI agent ("the UC" ) in exchange for (1) directly 
enriching the UC's business by supporting legislation in the 
California Senate that would lower the amount of money 
independent filmmakers have to spend on a film's budget in order 
to qualify for a California tax credit; and (2) indirectly 
enriching the UC by hiring the UC's purported girlfriend, UC-2, 



to a Senate staff position funded by the State of California. 1 
There is also probable cause to believe that RONALD CALDERON 
participated in a separate bribery scheme with MICHAEL D . 
DROBOT, the Chief Executive Officer of the Pacific Hospital of 
Long Beach, and accepted approximately $28,000 in bribes from 
DROBOT m exchange for directly enriching DROBOT' s business by 
supporting legislation that would delay or limit changes in 
California's workers' compensation laws relating to the amount 
of money medical care providers are reimbursed for performing 
spinal surgeries . 

6. There is probable cause to believe that DROBOT has also 
been paying RONALD CALDERON' s brother and former California 
State Assemblyman, THOMAS CALDERON, approximately $10,000 per 
month in connection with the bribery scheme. Although the 
payments are purportedly for THOMAS CALDERON to act as DROBOT' s 
consultant in connection with the spinal surgery legislation, 



There is also probable cause to 
believe that THOMAS CALDERON is facilitating bribe payments to 
RONALD CALDERON. In particular, a $25,000 bribe the UC paid to 



1 Based on my previous investigations, discussions with other law 
enforcement personnel, my training and experience, and internet 
research, I know that, in any one year period, the state of 
California receives in excess of $10,000 in Federal assistance. 



RONALD CALDERON went through Californians for Diversity, a 
California company that holds itself out as a 501(c) (4) 
Nonprofit Public Benefit Organization. According to RONALD 
CALDERON, the money contributed to this nonprofit organization 
is controlled by THOMAS CALDERON and they (RONALD CALDERON and 
THOMAS CALDERON) intend to use that money when RONALD CALDERON 
is no longer in public office. 

7. The evidence developed to date relating to RONALD 



CALDERON' s and THOMAS CALDERON' s bribery schemes can be 
summarized as follows: 

a. The Tax Credit Legislation - Beginning in or 
about February 2 012 and continuing through the present, RONALD 
CALDERON has accepted approximately $60,000 in bribe payments 
from the UC, who is posing as the owner of a film studio in 



downtown Los Angeles that provides studio facilities to 
independent films and commercials. At RONALD CALDERON' s 
direction, the UC made nine $3,000 payments to RONALD CALDERON' s 
daughter, JESSICA CALDERON, who, according to an employment 
agreement RONALD CALDERON drafted, works for the UC. JESSICA 
CALDERON has received these payments even though she has never 
done any work for the UC. In addition, UC-3, see infra <h 15(c), 
has made one $3,000 payment to RONALD CALDERON in cash. In 
exchange for these payments, RONALD CALDERON has agreed to help 
enrich the UC's purported film business by seeking an amendment 



to Section 17053.85 of the California Revenue and Taxation Code, 
which would lower the threshold of expenditures necessary for 
independent films to qualify for a tax credit from $1 million to 
$750,000. RONALD CALDERON was unable to introduce the $750,000 
amendment to the tax credit legislation during California's 2012 
.legislative session as he originally promised the UC. However, 

RONALD CALDERON has continued to take official action on the 

- 

UC's behalf by seeking to get the amendment introduced in 2013, 
either by including it in a spot bill RONALD CALDERON introduced 
himself (Senate Bill ("SB") 317), or by including it in a bill 
introduced by California State Senator Ted Lieu (SB 370) . 

b. Hiring UC-2 As A Legislative Staffer - Beginning 
in or about October 2 012 and continuing through on or about 
March 13, 2013, RONALD CALDERON accepted more than $30,000 in 
bribe payments from the UC in exchange for hiring the UC's 
purported girlfriend, UC-2, as a legislative staffer whose 
salary was to be funded by the State of California. In return 
for the bribe payments, RONALD CALDERON did, in fact, hire UC-2 
as an employee of the State of California, but the UC later 
advised RONALD CALDERON that UC-2 would not be taking the 
position because she was no longer in a relationship with the 
UC. At RONALD CALDERON' s direction, the UC paid, among others, 
the following bribes in exchange for RONALD CALDERON getting UC- 
2 the job: a $5,000 payment towards the college tuition for 



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RONALD CALDERON's son, Zachary Calderon, and a $25,000 payment 
to Californians for Diversity, a California corporation 
controlled by THOMAS CALDERON. 

c. The Spinal Surgery Legislation - Beginning on a 
date unknown and continuing until at least in or about August 
2012, RONALD CALDERON accepted approximately $28,000 in bribe 
payments from DROBOT. The bribes were disguised as payments to 
RONALD CALDERON's son, Zachary Calderon, who, according to 
RONALD CALDERON, worked for DROBOT each summer. The payments, 
however, in many instances, went directly into an account 
controlled by RONALD CALDERON. In exchange for the bribe 
payments, RONALD CALDERON helped DROBOT get spinal surgery 



legislation, which would economically harm DROBOT' s business, 
either delayed or amended* 




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Ill- PRIOR SEARCH WARRANT APPLICATIONS 

8. On October 16, 2012, the Honorable Paul L . Abrams, 
United States Magistrate Judge for the Central District of 
California, authorized the government to search RONALD 
CALDERON' s AOL email account, in substance, for evidence 



relating to RONALD CALDERON' s support of the tax credit 
legislation in exchange for bribes ("search warrant #1") . See 
CDCA CR 12-2390M. 

9. Then, on March 11, 2013, Magistrate Judge Abrams 
authorized the government to conduct a follow-up search of 
RONALD CALDERON' s AOL email account, in substance, for evidence 
relating to the tax credit legislation, the hiring of UC-2, and 
the spinal surgery legislation ("search warrant #2") . 

10. That same day, on March 11, 2013, Magistrate Judge 
Abrams authorized the government to search RONALD CALDERON' s i- 
cloud email account , in substance , for evidence relating to the 
tax credit legislation and the hiring of UC-2 ("search warrant 
#3"). See CDCA 13-0817M. Then, on April 3, 2013, Magistrate 
Judge Jean P. Rosenbluth authorized the government to search 
several locations, in substance, for evidence related to MICHAEL 
D. DROBOT's health care fraud scheme (search warrant #4) . See 
CDCA SA 13-115M, 13-116M, 13-117M, 13-127M, 13-132M, and 13- 
133M. 



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11. In addition, the prosecutor and I submitted an 
application for an order authorizing the initial interception of 
wire and electronic communications over RONALD CALDERON's 
cellular telephone, which United States District Judge Audrey B. 
Collins signed on March 8, 2013. On April 9, 2013, United 
States District Judge Collins signed an order renewing the 
interception of wire communications over RONALD CALDERON's 
cellular telephone for a second 30 day time period. 

IV. PRIOR INVESTIGATION 

12. I began an investigation of RONALD CALDERON, THOMAS 
CALDERON, and Charles Calderon (RONALD CALDERON's oldest brother 
who formerly served as the Majority Leader in the Assembly) , on 
or about October 15, 2007, after receiving information from the 
Fair Political Practices Commission and other sources. The 
investigation had to do, in part, with a $1 million check THOMAS 
CALDERON received from DROBOT, the Chief Executive Officer of 
Pacific Hospital of Long Beach, who retained THOMAS CALDERON as 
a consultant to negotiate with the State Compensation Insurance 
Fund, after THOMAS CALDERON left the California Assembly. 2 It 
was suspected that this exceptionally large and unusual payment 
might evidence that THOMAS CALDERON was using his brothers' 



2 See details in footnote 23 below. 



political influence to favor DROBOT xn return for monetary 
compensation, that is, a bribe. 

13. In or about December 2008, my investigation was added 
to an undercover investigation being conducted out of the FBI's 
Sacramento Field Office ("FBI Sacramento"). The undercover 
investigation involved two undercover FBI agents posing as 
venture capitalists, who were eventually introduced to RONALD 
CALDERON and THOMAS CALDERON. The undercover FBI agents 
separately told RONALD CALDERON and THOMAS CALDERON that they 
were interested in having legislation introduced in the 
California Senate that would be financially beneficial to their 
prospective investments. Neither RONALD CALDERON nor THOMAS 
CALDERON solicited or accepted a bribe in connection with their 

14. On October 18, 2011, the FBI's Los Angeles Field 



legislation , 




Office ("FBI Los Angeles") initiated an undercover investigation 
targeting two different public officials (not RONALD CALDERON or 
THOMAS CALDERON) in Los Angeles. During the course of that 
investigation, the UC was introduced to RONALD CALDERON and the 
events set forth below followed. On April 9, 2012, FBI Los 
Angeles added RONALD CALDERON as a subject of its undercover 
investigation, and on December 19, 2012, FBI Sacramento closed 
its undercover investigation . 



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V. PROBABLE CAUSE 

A. RELEVANT PERSONS & OFFICIALS 

15 . The following are the relevant individuals and public 
officials that will be referenced in my affidavit: 

a. The UC - The UC is an undercover FBI agent who 
has held himself out to RONALD CALDERON, JESSICA CALDERON, 
THOMAS CALDERON, and others as the owner of a film studio in 
downtown Los Angeles providing studio facilities for independent 
films and commercials . 

b. UC-2 - UC-2 is an undercover FBI agent who has 
held herself out to RONALD CALDERON, JESSICA CALDERON, THOMAS 
CALDERON, and others as the UC's attractive girlfriend with a 
struggling modeling career, 

c -. UC-3 - UC-3 is an undercover FBI agent who has 
held himself out to RONALD CALDERON, THOMAS CALDERON, and others 
as the UC's investor in the UC's studio. 

d. CHS-1 - CHS-1 (hereinafter gggjjj) is a reliable 
FBI confidential source who has been held out to RONALD 
CALDERON, JESSICA CALDERON, and THOMAS CALDERON as the UC's 
business partner in the UC's studio. 

e. CHS -2 - CHS-2 (hereinafter is a reliable 
FBI confidential source who 

lhas provided reliable information in 
the past on RONALD CALDERON. 



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h. Senator Kevin de Leon - Senator de Leon is a 



California State Senator representing California's 22nd 
District, which includes the Cities of Los Angeles, Alhambra, 
Maywood, San Marino, South Pasadena, Vernon and parts of 
unincorporated Los Angeles County. In exchange for the bribe 
payments outlined below, RONALD CALDERON has taken official 
action in seeking the support of Senator de Leon for the tax 
credit legislation and the spinal surgery legislation. 



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i. Senator Darrell Steinberg - Senator Steinberg is 
the President pro Tempore ("Pro Tern" ) of the California State 
Senate. He was elected to the Senate in 2006 and his Sixth 
district includes the capital city of Sacramento, parts of Elk 
Grove, Citrus Heights and Rancho Cordova. In exchange for the 
bribe payments outlined below, RONALD CALDERON has taken 
official action in seeking the support of Senator Steinberg for 
the tax credit legislation. 

j . Senator Ted Lieu - Senator Lieu is a California 
State Senator representing nearly 1 million residents of the 
coastal Senate district on the West side of Los Angeles, which 
includes the cities of Carson, El Segundo, Hermosa Beach, 
Lomita, Manhattan Beach, Redondo Beach and Torrance, as well as 
portions of Long Beach, Los Angeles and San Pedro. In exchange 
for the bribe payments outlined below, RONALD CALDERON and 
THOMAS CALDERON pressured Senator Lieu to drop legislation that 
would have frustrated DROBOT's health care fraud scheme. 

k. Senator Ricardo Lara - Senator Lara was elected 



wi 



Lth overwhelming support in November 2 012 to represent the 
Southeast Los Angeles County cities of the 33rd Senate District. 
As set forth below, Senator de Leon caused $25,000 to be 
contributed to Californians for Diversity, the California 
corporation controlled by THOMAS CALDERON, in exchange for 



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RONALD CALDERON agreeing not to challenge Senator Lara to become 
the Chairman of the Latino Caucus. 
B. THE CALDERONS 

16. According to the website sd3 0.senate.ca.gov ("RONALD 
CALDERON 7 s website"), which I have visited several times during 
the course of my investigation, RONALD CALDERON' s family and 
political background is as follows: 

a. RONALD CALDERON was elected to the California 
State Senate (District 30) in November 2006. 

b. RONALD CALDERON represents the cities of Bell, 
Bell Gardens, Commerce, Cudahy, Huntington Park, La Mirada, Los 
Angeles, Montebello, Norwalk, Pico Rivera, Santa Fe Springs, 
South El Monte, South Gate, Whittier, East La Mirada, East Los 
Angeles, Florence -Graham, Hacienda Heights, South Whittier, and 
West Whittier. (This will be subject to change once new Senate 
District lines become official) . 

c. RONALD CALDERON serves as a member of the 
California Wine Industry Committee, the Joint Committee on the 
Arts, the Environmental Quality Committee, the Governmental 
Organization Committee, and he is a highly respected member of 
the California Film Commission, joining the likes of Clint 
Eastwood and Danny DeVito in promoting California's film 
industry. 



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d. RONALD CALDERON currently lives in Montebello 
with his wife Ana Calderon and their daughter JESSICA CALDERON. 
JESSICA CALDERON is a recent graduate of Cal State Fullerton. 
Zachary Calderon (RONALD CALDERON' s only son) attends the 
Berklee College of Music in Boston, Massachusetts. 

e. RONALD CALDERON is the second of his family to 
serve in the California Senate and the third to hold a seat in 
the California legislature. RONALD CALDERON' s oldest brother, 
Charles Calderon was elected to the California State Senate in 
1990 and termed out in 1998. RONALD CALDERON' s middle brother, 



THOMAS CALDERON, served in the California Assembly from 1998 to 
2002 . 

17. According to the website www.charlescalderon.com, 
Charles Calderon served in the California Assembly for the 58th 
Assembly District, where he was the Majority Leader. According 
to the website http://asmdc.org/members/a58, in November 2012 he 
was succeeded by current Assemblyman Christina Garcia. 

18 . 



THOMAS CALDERON is 
the Executive Director of Calif ornians For Diversity. 

19. I have reviewed bank records obtained from Banco 
Popular pursuant to a federal grand jury subpoena and learned 



m 15 - 



that THOMAS CALDERON is also the signatory on a bank account 
opened in the name of the Calderon Group. 

C. THE TAX CREDIT LEGISLATION 
i . Senate Bill 1167 

20. On February 5, 2013, I visited the website 

www.leginfo.ca.gov, a website hosted by the State of California, 

and learned that on February 22, 2012, RONALD CALDERON 

introduced Senate Bill ("SB") 1167 ("the tax credit 

legislation") . In summary, SB 1167 sought to amend tax credit 

legislation RONALD CALDERON had previously introduced in 2009 

by, among other things, extending the "tax credits five 

additional years, until July 1, 2020." Two subsequent 

amendments were offered to the tax credit legislation on June 4, 

2012 and July 5, 2012. None of the three amendments sought to 

amend the definition of "independent film." In other words, 

Section 17053.85 of the California Revenue and Taxation Code 

would have still provided as follows: 

"Independent film" means a motion picture with a 
minimum budget of one million dollars 
($1,000,000) and a maximum budget of ten million 
dollars ($10,000,000) that is produced by a 
company that is not publicly traded and publicly 
traded companies do not own, directly or 
indirectly, more than 25 percent of the producing 
company. 

ii . The UC Hires JESSICA CALDERON 

21. On or about October 18, 2011, the FBI's Los Angeles 



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Field Office initiated an undercover operation in which the UC 
posed as the owner of a film studio in downtown Los Angeles, who 
provided studio facilities for independent films and 
commercials - 

22. On February 24, 2012, RONALD CALDERON was introduced 
to the UC during a lunch held in Los Angeles, California. Also 
present were I ffi ^ ™ " r *TSS^^ ' ^S^ iii s»—aL^J iSj 



23. I monitored this meeting as it was taking place using 
an audio transmitter. I have since listened to a recording of 
the meeting and learned, among other things, the following: 

a. The UC introduced himself to RONALD CALDERON and 
said that he owned a film studio in downtown Los Angeles, where 
he provided studio facilities for independent films and 
commercials . 

b. RONALD CALDERON explained to the UC that he had 
introduced a movie production tax credit bill in California 
three years earlier, which was later enacted and provided a $500 
million tax credit to filmmakers for the next five years using a 
lottery system through the California Film Commission. 

c. RONALD CALDERON told the UC that every year since 
the tax credit legislation was enacted the 100 million dollars 



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allocated for that year had immediately run out as soon as the 
lottery was opened. 

d. RONALD CALDERON told the UC that more tax credits 
would be available in the future, but said it was very political 
and he (RONALD CALDERON) had to work from the top down, starting 
with the governor, to make sure the bill was signed if it made 
it to the governor's desk. 

e. The UC asked RONALD CALDERON if there was 
anything the UC could do for him. RONALD CALDERON said he would 



be running for the California State Assembly in 2 014 and asked 



t. 



the UC if he could help with that. 

f. Towards the end of the meeting, RONALD CALDERON 
told the UC that his son, Zachary Calderon, was studying music 
at Berklee College in Boston and that his daughter, JESSICA 



CALDERON, was attending the LA Art Institute for Interior Desiqn 
and had already received a degree in Theatre Arts from CSU 
Fullerton. RONALD CALDERON told the UC that his daughter had 
made a movie and was the line producer for a film he referred to 
as "American Gigolo 2." 

g, RONALD CALDERON told the UC that JESSICA CALDERON 
and others involved with the script for American Gigolo 2 were 
looking for producers. RONALD CALDERON asked the UC if he would 
like to look at the script and see if the UC's studio might be 



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interested in getting behind the movie. RONALD CALDERON gave 
the UC his business card. 

h. On February 24, 2 012, the UC received a text 
message from RONALD CALDERON over his cellular telephone 
stating, " [UC] . Great lunch! Thanks. Here is my cell! I am 
emailing u next." 

24. On June 21, 2012, the UC and RONALD CALDERON met alone 
at a restaurant in Pico Rivera, California for dinner. During 
the meeting, RONALD CALDERON told the UC, among other things, ' 
"one way you could be a real help to [JESSICA CALDERON] is, you 
got any work? ... I think she's a good investment. Any, any 
work, uh you could find her would be well appreciated and you'll 
appreciate her work. Are - I told you man, anything you can do, 
any help you could do for my kids is, is - you know that's^ 
that's diamonds for me. That's diamonds." 

25. The UC told RONALD CALDERON that he had looked over 
the script for American Gigolo 2 and felt like the budget for 
the film was around $500,000 given the number of locations in 
the script. The UC suggested that it might be worth investing 
in the film if the threshold for the tax credit legislation was 
lowered to $500,000. The UC told RONALD CALDERON that just the 
mention of the tax credit would put his investors "over the 
roof . " 



- 19 - 



26. RONALD CALDERON told the UC the tax credit legislation 
would be before the governance committee the following week and 
said, "there might be a play, you know, to lower, to lower the 
tax credit. Uh, for movies, for inde- or indies." RONALD 
CALDERON then suggested that he would be willing to hire the 
UC's girlfriend (UC-2) if the UC would hire JESSICA CALDERON at 
the UC's studio, since Mi] t helps both of us." RONALD CALDERON 
said that his daughter, JESSICA CALDERON, could do any project 
the UC wanted done. RONALD CALDERON said the only limitation 
was that JESSICA CALDERON would need the flexibility to go to 
class two days a week and to do her internship at the design 
center two days a week. 

27. With respect to JESSICA CALDERON' s salary, RONALD 
CALDERON said, "all I need her to do is make enough money to pay 
for her - the rest of her schooling, which isn't a lot. It's 
like - it's like, two thousand, three thousand a year plus, uh, 
uh - no quarter, so six thousand. And then buy her own 
insurance which is about four hundred, five hundred bucks a 
month ... if she could work two- three days a week for you and 
make, you know, urn, twenty five hundred bucks a month. Two 
thousand five hundred, uh - I mean you'd get your money's worth 
out of her. She's a workhorse... But that would make uh - man 
that would make all the difference in the world for her." 



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28. The UC asked RONALD CALDERON if there was still a 
possibility that the threshold for the tax credit legislation 
could come down to $500,000. RONALD CALDERON responded, "The - 
there - there - there's a chance. There's a shot. You know 
it's a matter of where - what negotiating position I put myself 
in and how much they're actually willing to give us." RONALD 
CALDERON went on to explain that certain industries like the 
labor industry might push back against lowering the tax credit 
to $500,000. 

29. The UC asked RONALD CALDERON what number would keep 
the labor industry away. RONALD CALDERON said that he felt he 
could get $750,000 through the Senate Committee, but that he 
would have to have a meeting with the indies and labor 
industries before the amendment got to the Assembly Committee so 
he could let the labor industry know he wanted to "lower it just 
a tad." RONALD CALDERON said he would have the meeting in his 
office and tell the labor industry that if they want more 
regular work for their members they should get onboard with the 
legislation. RONALD CALDERON felt that if the labor industry 
got onboard the "big guys" (presumably major film production 
companies) would not want to lose the entire bill "over that." 

30. After hearing this, the UC told RONALD CALDERON that 
he was willing to put JESSICA CALDERON on a retainer during the 
remainder of her college. RONALD CALDERON responded, "Oh, 

- 21 - 



great!" The UC said he was ready to move in that direction and 
asked RONALD CALDERON what they needed to do in order to make 
the $750,000 happen. The UC indicated that he was willing to 
put JESSICA CALDERON on his payroll the following week if the 
$750,000 could "happen sooner rather than later," The UC 
explained to RONALD CALDERON that lowering the tax credit to 
$750,000 would be a real selling point for the UC studio. 

31. RONALD CALDERON responded, "Right. Well, considering, 
considering that the, the committee and the chair, they don't 
give a shit. What the machinations are. They don't care. It's 
all about creating jobs, keeping the movie industry here in 
California, right? Urn. Let me do this. To answer your 
question, I can play - I can play poker and hold out, so . . . 
And I'm the author of the bill. I'm not going to move the bill 
forward unless I get a deficit. Period. Right? And be willing 
for it to fall apart, which it won't. But let me read the 
language and sit down with my staff. And I can do this, you 
know, Monday, Tuesday when I go back, and see what we can do to 
tweak the language so that I can make that, I can make that play 
and I know that it can happen. . ." 

32. On June 29, 2012, the UC and RONALD CALDERON met for 
breakfast at a diner located in or around Montebello, 
California. During the meeting, RONALD CALDERON told the UC 
that he had not yet introduced the $750,000 amendment to the tax 



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credit legislation, RONALD CALDERON said he could introduce the 
amendment either before it goes to the Senate's Appropriations 
Committee or when it goes to the Assembly side. 

33. RONALD CALDERON and the UC then discussed JESSICA 
CALDERON' s employment. RONALD CALDERON suggested drawing up a 
contract that would make JESSICA CALDERON an independent 
contractor for the UC studio. RONALD CALDERON told the UC it 
was "better to keep it legit." RONALD CALDERON offered to draw 
up the contract and send it over to the UC by July 15, 2012. 

34. The UC told RONALD CALDERON that he had JESSICA 
CALDERON' s first pay check with him at the diner and was 
prepared to give it to RONALD CALDERON that day. RONALD 



CALDERON initially agreed to take the check, but later told the 
UC to mail it to JESSICA CALDERON. Earlier in their 
conversation, RONALD CALDERON told the UC about an investigation 
the United States Attorney's Office and the FBI were conducting 
into public officials in Cudahy, California. RONALD CALDERON 
had told the UC you never take money directly from people and 
you have to be careful about a tit-for-tat relationship. 

35. On July 4, 2 012, approximately five days after RONALD 
CALDERON told the UC to mail JESSICA CALDERON' s first paycheck, 



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the UC received an email from RONALD CALDERON that said, among 
other things, "Didn't receive anything yesterday FYi . " 3 

36. On July 17, 2012, the UC and RONALD CALDERON met at 
the UC's apartment in downtown Los Angeles, where they 
discussed, among other things, the tax credit legislation and 
JESSICA CALDERON' s employment: 

a. The UC informed RONALD CALDERON that having the 
UC studio enter into a contract with JESSICA CALDERON wherein 
she would be paid a monthly retainer for serving as the UC 



er was "i 



studio's set designer was "not the industry standard" and was 
"not common. " 



b. The UC explained to RONALD <&lLDERON the real 
reason for hiring JESSICA CALDERON: 

UC ...it's not. a concern to me. Money is not an object. 

mean...I'm ready to write a check for the next year...if 
that ' s what you want... . 

RC Right...right . 

UC ...f or...f or...everything. That ' s...that' s not the issue. 

And it's never been the issue. 



RC Uh huh. 



UC Jessica's talent...uh...her acumen...that ' s not even an 

issue. That the whole concept behind this was...we...we 
have a relationship. We have a professional 
relationship. We have a business relationship. And, 



3 This email and several of the others referenced in my 
affidavit were sent from RONALD CALDERON' s America Online 
("AOL") email account, a provider of electronic communications 
service and remote computing services located in Dulles, 
Virginia . 



- 24 



to put it in very blunt terms, me hiring Jessica was 
not about her talent , right? It was more about 
accommodating something that you needed. And you 
needed me to take care... 

RC Right . 

UC ...helping your children, 

RC Right . 



c . RONALD CALDERON said that he viewed the document 
he had prepared as an "agreement" and said it was "not a 
contract." RONALD CALDERON also addressed the UC's reason for 
hiring JESSICA CALDERON: 

RC The second problem I have...that,..um...and again this is an 

uncomfortable thing to do, okay, but because of my 
position, you cannot.,.we cannot have a conversation we 
just had. We cannot have a quid pro quo conversation. 

UC But I feel like that's...I mean... I understand... 

RC No [UI]... 

UC ...where you are coming from. Okay? I totally get it. 

But the reality of it is...I mean this is something I ' ve 
engaged in all the time in India...this is the thing 
that I'm doing right now in Virginia. And it's 
just...for me, it's just the price of doing business. 
If you wanna call it, something else, I...I completely 
understand f or...comf ort levels, 

RC What...what...what I have to say...what I have to 

say...is...that I cannot guarantee that I can help you. I 
can' t . . And I cannot take payment...or...uh...negotiate 
payment for Jessica in any way with the...with the...with 
the understanding that I'm gonna do this for you, and 
it's gonna be deliberate. Um...because I would do that 
for you whether...whether this was involved or not, 
because I've been trying to figure out a way,..to have 
more minorities in film benef it...f rom this tax credit. 
And this is the way to do it by...by...uh...lowering the 



- 25 - 



threshold amount and possibly even expanding the ten 
tnillion...the guaranteed ten percent—whatever that 
is...to...f if teen percent or something like that. 4 



d. After explaining to the UC the types of 
conversations they "cannot have" and what RONALD CALDERON would 
"have to say" if those conversations came up, RONALD CALDERON 
went on to assure the UC that he would "deliver" on the 
legislation by having it introduced in the California Senate by 
Senator Steinberg, and said- that if he did not deliver on the 
legislation, the UC would have "no obligation" to continue 
paying JESSICA CALDERON under the terms of the "agreement" s 



RC And [Senator Steinberg] said...he'll get my bill out of 

appropriations, and once it's cleared in senate ... it ' s 
a vehicle that can't be stopped. Unu.then I'm gonna 
ask him...to...to..,uh..,um...demand that amendment. It's gonna 
be him saying, I ain't supporting this unless we do 
more for minority, uh...smaller independent films. So I 
wanna add.„I wanna either lower the threshold. . .you 
know, and/or increase the...uh...appropriation. Or you 
know, one of the two, but somehow...with the 
threshold...so we have more minorities. 

UC Sure . 



RC So...that's the play. Okay? The industry might come 

back. I doubt if they are gonna come back and say, 
nah forget it, all bets are off. We're not gonna 
lower it..,f or..,you know...f rom...uh...uh...a million to five 
hundred thousand. 

UC Sure . 



4 On February 29, 2 012, RONALD CALDERON had received an email 
from Tommy Ross, the President and CEO of Pinnacle Strategy 
Group, which referenced a conversation with RONALD CALDERON 
regarding the extent to which minority producers are informed of 
the production tax process and its benefits, and possibly doing 
a "carve out" of the tax credit for minorities. 



- 26 - 



* * * 

UC I guess I was confused, because... 

RC Yeah. 

UC ...when we first started talking about this, and I joked 

with you about...bringing Jessica on... 

RC Yeah. 

UC ...or doing Jessica's film and joked about how it 

wouldn't even qualify for the tax credit. 

RC Right . 

UC The first thing I thought about was.„you came to me and 

said, x would it help?' 

RC Yeah. 

UC And I felt as if...there was some type of... 

RC You're right. I did come to you, didn't I? 

UC And I felt like,..that was a sign to me... I needed 



to help you. I mean...I would help you anyway. 
But...realistically speaking, you're doing a huge thing 
for my studic.for me...and I wanna make sure...that I take 
care of you. 

Yeah. When.„and you know... [UI] , and if you look at 
this,.,this is exactly why I phrased it [UI] did 
it...because if I'm not able to deliver and you know, 
and you feel that you need to move on.,.and...a certain 
direction...you know...there ' s no obligation. 

Yeah, but...then...then...and again, ...it ' s not so 
much...f or,..f or me. I haven't had the benefit of looking 
at this before... 

RC Yeah, 

UC ...it wasn't so much the idea of...hiring Jessica that 

worried me. Or.„paying for Jessica's salary...or 
whatever it was. The issue was.„pl2|J now has eyes 



RC 



UC 



- 27 - 



on...what's going on. 
RC Right . 

UC And this is business...arrangement between you and I, 

and it's not between 



e. RONALD CALDERON made it clear to the UC that "it 
may not happen" but that he would "do everything [he] can" for 
it to happen. RONALD CALDERON added, Mi] f you think through it 
logically...there' s no reason why they would object to it, 
especially when it's this close to being done." 

f . The UC told RONALD CALDERON he was not expecting 
RONALD CALDERON to be a "magic man" and was willing hire JESSICA 
CALDERON to "reward" RONALD CALDERON for his "support" of the 



legislation : 



RONALD CALDEROI 



UC I don't I, again, it's politics, and I don't look for 

guarantees in it, but...I do look for support. 

RC Right . 

UC And...support is rewarded. I mean, I...for lack of better 

term. And I wanna make sure I reward... your support 

RC We'll... 

UC [UI] 

RC The way you earn my support is...is...um...you know, take 

advantage of it, make a lot of good movies, hire 
people, and create jobs. That's how you...that's how 
you reward my support . And...and...the reason why I 
wanted this, if you don't wanna do this, I'm fine with 
that, the reason why I wanted this, is that...I want you 
to hire Jessica and, you know, for her...for her 



- 28 - 



talents. And uh.,.and more than just because...you know, 
it's one thing, even if it's a f riend...just a fact that 
I'm a senator and it...it creates that..,you know 
that...area we don't wanna get in (UNT) . 

g. When the UC expressed confusion over this 
explanation for hiring JESSICA CALDERON pursuant to a written 
agreement, RONALD CALDERON added that having the agreement in 
place would prevent the UC's partner, | £g§l from making trouble 
about "what we are doing" : 

UC You'll- have to excuse me, because I'm ignorant to a 

lot of this. It's almost like..,I have to be a bull in 
a China shop around you, right now... 

RC Yeah. 

UC ...and get some guidance. 

RC I get it. 

UC Because I don't. I'm not operated by the rules for 

quite some time, and I don't...I never have.' You know, 
I operate by the different set of rules in terms of 
profit margin, 

RC in Calif ornia...well...it ' s a lot more restrictive here 

than any other place in the country, but...but in 
general it's still...you know...in general there's this 
quid pro quo...that ' s...acceptable , you know... 

RC ...and...and uh...uh...there ' s been a lot of people that have 

done...I mean even you know...let ' s...let ' s say I'm a 
disgruntled partner. Right? And finds out about what 
we are doing and they go out, you know...make trouble. 
This is why I want.„this is proof...this is,..proof that 
you're not doing this for me. You're doing this for 
Jessica. Cause she's got a certain skill set. You 
know? But,..um...I mean this, you know, ...this...is great...this 



- 29 - 



is., is. The argument could be made, you know..,that 
there's some kind of agreement. Right? 

UC Sure , 

RC So I mean if it's implied, it's a big deal. 

UC Business card is a business card...it's one thing. She 

doesn't know that... I made those for her [laugh] 

RC Okay . 

UC But, that being said,... 

RC Yeah, 

UC ...I've always had good relationships, and I think 

that's...the basis...the last five girlfriends I've had 
still call me. Still checkin on me. Still wanna make 
-sure I'm tucked in at night. 



UC 




RC I wasn't even...I'm just saying... 



No , no, no, no . 



RC [UI] That kind of shit happen to people get in 

trouble. 

UC . I completely understand. People wants to screw the 

other person over...hold something over their head. 
That's never been an issue with me before... 

RC Yeah. 

UC ...and I don't anticipate being an issue now, 

UC Or in the future , 

RC Right , 

UC And it's all about building relationships, and I feel 

like you and I hit that point where I'm comfortable 
talking with you about this. Only because, it's been 
a very stressful week for me for the last couple 
weeks. This guy in Florida, is looking for some kind 



- 30 - 



of—signal that this legislation is going to move 
forward. If it doesn't, so be it. 



RC I...I...I will...um.,.um...I will be very positive about this. 

With your. . .with your...associate... there's no question 
about that...because I'm very positive, but I don't see 
any...I don' t see it not happening... 

UC Sure 

RC but you never know. And I can't go into an agreement 

with you saying, 'you give, you know, you do this, and 
I'll do that ' ...because I, I can't promise you. 

UC Sure . 

RC You know. So...and it's something...it ' s something that...I 

was gonna do anyway...you know. 

UC No, I appreciate that, because it's gonna make, help 

my business . 

RC Yeah . Okay . Great . 

37. On July 19, 2012, RONALD CALDERON and his son, Zachary 

Calderon, met with the UC and at the UC studio. While the 

UC and RONALD CALDERON were alone in the UC's office, the UC 

signed the employment agreement RONALD CALDERON had prepared. 5 

When the UC asked RONALD CALDERON what amount he should write on 

JESSICA CALDERON' s first paycheck, RONALD CALDERON said, "I 

think we said three, which would help me cover the tax and all 

the other liabilities." When the UC asked RONALD CALDERON what 

date he should write on the employment agreement, RONALD 



5 On July 17, 2012, Ana Calderon, RONALD CALDERON' s wife, 
received an email from RONALD CALDERON in which he asked her to 
draft the employment agreement RONALD CALDERON later provided to 
the UC and to date the agreement July 1, 2012. 



- 31 - 



CALDERON said to the UC, referring to the employment agreement, 
"Is it okay if we back-date this to July 1 st ?" as the date it was 
signed (presumably to justify full payment of the $3,000 for 
that month) . 

38. The one -page agreement RONALD CALDERON prepared was a 



"Studio Services Agreement" that said the UC would "retain" 
JESSICA CALDERON on a "monthly retainer" for "an indefinite 
period of time" to provide services, including, but not limited 
to, "meeting with existing and future clients, set design 
consulting, advertising and marketing design consulting, and 
general film production assistance and consulting." 

39. RONALD CALDERON explained to the UC during their 
meeting at the UC studio that JESSICA CALDERON could not attend 
the meeting because she was working on a project, but that she 
was "done today." RONALD CALDERON told the UC he would have 
JESSICA CALDERON sign the agreement and give the UC a copy. 

40. On August 1, 2012, the UC contacted RONALD CALDERON 

over the telephone to confirm RONALD CALDERON' s residential home 

address. After confirming RONALD CALDERON' s address and setting 

up a dinner meeting, the UC asked RONALD CALDERON about the tax 

credit legislation, resulting in the following exchange: 

UC What the- what's the situation with, uh, the tax 

credit bill? He [the UC's investor ("UC-3")] says 
he's just curious what's going on right now and 
where it's at. 



- 32 - 



RC We are going to, uh, we are going to hear it in 

Appropriations possibly Monday, this Monday 

UC This Monday? 

RC Yeah, I'm gonna try and get it out on 

Appropriations Monday, And then we've already put 
the, uh, we already put the plan in motion for, 
uh, raising the, uh, the production cost for 
Indies, uh, to...I'm sorry. Raising the 
appropriation to 15%, and the threshold level to 
$500, 000 . 

UC Okay, fantastic. So what do you think, that's 

gonna happen on Monday? 

RC No , no , no . What ' s gonna happen is , we ' re gonna 

get it out of Appropriations and then, then we go 



over to the Assembly. So, we'll have time on the 
Assembly side 'cause they'll have two committee 
hearings and then it goes to the floor, and then 
without amendment it will come back to our house 
for concurrence. So, that all has to happen, uh, 
you know, in August. So, we're uh, you know, 
we're working on it. But we don't want- we don't 
want to blow it up before we get it out of, uh, 
Appropriation. 

UC Okay. 

RC Alright . 

UC So, the -the amendment won' t happen in 

Appropriations then? 

RC No. No, no, no. Because then we may, we may piss 

off uh, too many people. We gotta lay, you know, 
we gotta...it's gotta be delicate to affect your 
situation. 

UC Okay . 

RC Yeah, 

UC So you... 

RC We have a plan. 



- 33 - 



When do you think the amendment will take place? 



Ummm. When we get to, urn, as soon as we get our 
bill out of Appropriations, uh, it will probably 
go to the floor, uh, to our floor, uh, within 
that same week. Which means the following week, 
which should be the week aft-the week after, so 
let's say mid August it will be on the, uh, on 
the Assembly side, uh, and that's, and when it 
goes over there we'll add the amendment. 

Okay, so it's mid August we're talking about. 

Yes, so a couple of weeks, we should have the 
amendment in and, uh, 'cause we wanna work with, 
we wanna work with the, uh, labor guys, we wanna 
just, we don't wanna just drop it on them, we 
wanna work with them, the labor guys, uh, the 
Indie film people, and then, urn, and then the big 
five, just, you know. And the reason why I think 
we ' 11 be able to get it through is that there ' s 
only 15, the...right now is a 10% appropriation for 
indies, from the tax credit, I'm asking to go to 
15 , and then lower the threshold from 1000 , up - 
from a million to 500,000. So, that way you just 
spreading out , you know , you 're just widening the 
piece of pie for the Indie's, uh, so the only one 
that might be upset are the big guys, so if they 
are, we will have some wiggle room there, we can 
lower it, you know, we can lower everything a 
little bit more. 

Okay. 

You know what I'm saying? 
All right. 

'Give me wiggle room on a million, and then wiggle 
room on the uh, on the appropriation. 

Okay, I guess, uh, I'll tell you, it's been a 
major issue over years as part of this, uh 
delicate negotiation with, uh, [the UC's business 
investor]. But, I'll tell him more about it, urn. 



RC Yeah. 

UC 'Cause, I'm sure you saw that New York, obviously 

you did, you... 

RC Yeah 

UC Sent me the article. 6 

RC Yeah, I did, yeah, yeah. 

UC All right. We know what's going on, and 

certainly, you know, I think it's gonna help our 
case, uh, 'cause I certainly don't wanna, you 
know , lose ground . 

RC Right . 

RC And I think because...I think that article...I mean, 

what's going on in New York is gonna help us with 
our negotiations because the industry is not 
gonna wanna blow this up over a few million 
dollars . 

UC Right . 

RC They're just not gonna blow it up. So, I think 

it's on our side, you know, everything is on our 
side and we got the momentum to do it, and of 
course there's always, there's- there is the 
minority aspect of it. You know, getting more 
minority film producers, they are usually 
smaller, you know in that smaller, 500,000, to 
$750, 000 range. 



UC 



Okay, all right. Look, uh, I gotta get off the 
phone here. But, definitely keep-keep a look out 
for the check in the mail tomorrow. Shoot me an 
email when you get it, just so I know that you 
got it . 



On or about July 31, 2 012, the UC had received an email from 
RONALD CALDERON containing a newspaper article published in the 
Daily Variety. The article explained how the State of New York 
had recently passed legislation giving film producers a tax 
credit . 



- 35 - 



RC Okay . 

41. Shortly after this meeting, the UC caused a check in 
the amount of $3,000 with JESSICA CALDERON's name written on it 
as the payee to be mailed via United States mail to RONALD 
CALDERON's residence in Montebello, California. 

42. On August 2, 2012, after the check was mailed, the UC 
received an email from RONALD CALDERON saying, "Package 
received. Ty," At that point, although RONALD CALDERON had 
invited the UC to have dinner with JESSICA CALDERON and several 



others on July 31, 2012, to discuss a project JESSICA CALDERON . 
was working on involving Nike sports, a dinner which the UC did 
not ultimately attend, JESSICA CALDERON had done no work for the 
UC studio or the UC. Nor has JESSICA CALDERON done any work for 
the UC studio or the UC as of the date of this affidavit despite 
receiving payments totaling $27,000 

43. On August 2, 2012, the UC invited RONALD CALDERON to 



have dinner on August 9, 2 012 at a restaurant in downtown Los 
Angeles. RONALD CALDERON asked the UC if he should bring 
JESSICA CALDERON along to the meeting. The UC responded, "Not 
necessary, want to focus on this week with my investor and tax 
legislation . " 

44. On August 10, 2012, the UC, his girlfriend, UC-2, 
RONALD CALDERON, and RONALD CALDERON's wife, Ana Calderon, 
attended the Imagen Awards ceremony at the Beverly Hilton hotel. 



RONALD CALDERON had previously invited the UC and UC-2 to join 

him at the event. During this event, RONALD CALDERON told the 

UC, "Nobody will ever know that the reason this happened is 

because of you, I would not have pushed this hard if it wasn't 

for you." RONALD CALDERON further told the UC that he would be 

introducing the amendment in the California Senate on Tuesday 

(August 14, 2 012) and that it would hit the Assembly floor by 

Thursday (August 16, 2012) , 

iii . Proposition 26 and the Letter to the UC's 
Investor 

45, On August 14, 2012, the UC received an email from 
RONALD CALDERON titled "We were just thrown a curveball," The 
email, which was originally sent to RONALD CALDERON from 
john.scribner@sen.ca.gov and then forwarded to the UC, stated 
that Legislative Counsel to the California Senate had just 
opined that under the provisions of Prop 26 any amendment 
lowering the threshold for the tax credit legislation to 
$750,000 would require two-thirds vote. 7 The rationale for Prop 
26 being triggered by the proposed amendment was that "we have a 
capped amount available for the independents (10 million) we 
would potentially be lowering the tax credit some might once 



7 The website www.govbuddy.com/directory/staff/CA/, lists John 
Scribner as a Legislative Director. I searched Scribner's name 
using the California State Bar website www.members.calbar.gov 
and he does not appear to be an attorney licensed in the State 
of California . 



again qualify for." The email also said that RONALD CALDERON 
should "drop the payroll service issue" if he (RONALD CALDERON) 
no longer intended to introduce the $750,000 amendment, since 
this would make it "unnecessary to placate labor." 

46. Shortly thereafter, the UC received a second email 

time t 



from RONALD CALDERON. This 
Screwed ! " ********* ' _t iiBjBBB 



the email began, "We are 





47. The UC wrote back to RONALD CALDERON, "This is 
bullshit, Ron. We gotta make this work. Even if the proposed 
amendment is shot down, We win. If we don't even propose the 
amendment, then I'm done. So is [the UC studio] in CA. All 

[the investor] needs is for CA to introduce/demonstrate a 

i 

willingness . " 



- 38 - 



48. The response the UC received from RONALD CALDERON was, 
"I haven't given up but now we are walking a very fine line. 
I'm working with legislative council on this to c if there any 
way around this. Also looking into maybe having leg council 
delivery on official opinion on the amendments that you can show 
[the UC investor] . Worst case scenario. Maybe, maybe.,.we take 
the amendments up for a vote on the floor, let them die, then 
take up the tax credits as is. Let me get back to you." 

49. The UC and RONALD CALDERON had one telephone 
conversation on August 14, 2012 and another telephone 
conversation on August 15, 2012. During both conversations, the 
UC and RONALD CALDERON discussed RONALD CALDERON' S various 
strategies for getting the $750,000 amendment passed without 



triggering Prop 26. At the outset of the first conversation the 
UC told RONALD CALDERON, "Hey, I wanted to make sure you 

■ 

understood that uh the e-mail about it being bullshit and all, 



that wasn't directed at you. That was just me being off the 
cuff and frustrated with this whole process, 'I know... 
[Interrupted]' and You're getting a lot of stuff from me and 
I've done stuff for you and we've helped each other out 
tremendously and I know we're on the same page." 

50. RONALD CALDERON responded to the UC's apology by 
saying, "Yeah, you didn't-you didn't hear my uh [chuckles] 
lecture this morning either, so.. . I know how you feel uh we're, 



um, we're working on it, not gonna — I'm not gonna - I'm not 
gonna say anything to you yet till I have all the facts but, 
there might be a way around it the problem is, is, uh, it's a 
continuing tax credit..." 

51. The two strategies that RONALD CALDERON shared with 
the UC were, in substance, as follows: (a) have RONALD CALDERON 
argue to Legislative Counsel that Prop 26 would not be triggered 
by the proposed amendment and that Legislative Counsel's earlier 
opinion that lowering the threshold to $750,000 was a "taking 
away" for some (a tax) was just a wrong interpretation of Prop 

*ld cal; 



26 and (b) have RONALD CALDERON' s bill include a "sunset" 



provision so that it was no longer an extension of an existing 
program but rather a new tax credit, which would make it clear 



as some 




that the amendment 
"taken away. " 

52. On August 17, 2012, the UC and RONALD CALDERON met at 
the UC studio after RONALD CALDERON failed to introduce the 
$750,000 amendment in the California Senate. The UC began the 
meeting by telling RONALD CALDERON that he brought JESSICA 
CALDERON on the payroll with the goal of helping RONALD CALDERON 
and had hoped RONALD CALDERON would help him in return by 
introducing the $750,000 amendment to the tax credit 
legislation. The UC told RONALD CALDERON that he if he could 
not introduce the amendment to the tax credit legislation it was 

- 40 - 



"not a big deal" and that he did not want to put pressure on 
RONALD CALDERON. The UC said, however, that he had made 
representations to his investor based on what RONALD CALDERON 
told him at the Imagen Awards about introducing the amendment. 

53. After RONALD CALDERON gave the UC a brief explanation 
of why the amendment could not be introduced as planned, the UC 
asked RONALD CALDERON if there was anything RONALD CALDERON 
could still do for the UC to help (with UC-3) . RONALD CALDERON 
responded, "Certainly... I mean, I am happy to talk to them and 




tell them I am interested. Uh, there are shortcomings that we 



need to overcome and we need to bring those to liqht... I think I 
can still help the industry, you know ... I am all about ... I am 
the Chair of the Latino Caucus next year. I want to help my 
people. And, they are all, they are all small businesses." 
RONALD CALDERON told the UC he wanted to hold public hearings 
and encouraged the UC and his investor to testify at them. 

54 . RONALD CALDERON reminded the UC that Senator Steinberg 
had supported lowering the threshold amount: "That is why it is 
all about relationships. I mean, just to get [Senator Steinberg] 
to have been behind this, [your investor] needs to know that. 
Just the fact that [Senator Steinberg] is behind pushing 
lowering the threshold, is huge. It's huge. And he did it 
because of our relationship. And, I helped him, he helped me...It 



- 41 - 



was important to me . I did something that I knew was important 
to him. It is all about relationships." 

55. The UC told RONALD CALDERON he did not want to put any 
pressure on him to do anything. RONALD CALDERON said, "My...my 
commitment is as strong, if not stronger, than yours. So, don't 
ever feel like you are pressuring me, okay? All you are doing 
is sharing your frustration with me." 

56. On September 5, 2012, approximately two weeks after 
their meeting at the UC studio, the UC received an email from 
RONALD CALDERON asking, among other things, "should Jessica 



expect a check this month." The UC responded that there was a 
small "hiccup" with the check that the UC would explain when 



they met up, 



57. On September 10, 2012, the UC and RONALD CALDERON met 
for dinner again at the Pico Rivera restaurant. During the 
meeting, the UC asked RONALD CALDERON if he would be willing to 
write a letter to his investor stating his commitment to 
introducing legislation that would lower the threshold for the 
tax credit legislation to $750,000. RONALD CALDERON immediately 
agreed to write the letter but told the UC that he would need to 
direct the letter to a broader audience, like an association or 
a commission. RONALD CALDERON told the UC it would be fine for 
them to make up an association or commission, so long as they 
were the ones to whom the letter was addressed. 



- 42 - 



58. To demonstrate his continued willingness to take 
official action to get the amendment introduced, RONALD CALDERON 
told the UC how he had purchased two VIP tickets to a Giants 
baseball game for Senator Steinberg the week before, RONALD 
CALDERON said he also gave two tickets to oil industry 
executives so they could meet Senator Steinberg at the game and 
help support his campaign. RONALD CALDERON said that after the 
game he placed a call to Senator Steinberg and discussed the tax 
credit bill. 

59. At around this point in the conversation, RONALD 
CALDERON asked the UC what the hiccup was with JESSICA 
CALDERON' s check for the month of September. The UC told RONALD 
CALDERON he wanted to pay JESSICA CALDERON from his personal 



bank account as opposed to the UC studio's bank account from now 



ited to 



on. The UC said he wanted to do this because revenues were down 
and he did not want the checks to attract the attention of 
his partner in the UC studio. The UC said he wanted to first 
ask RONALD CALDERON if switching the source of the payments was 
a problem, since RONALD CALDERON was a public official and the 
payments to JESSICA CALDERON could now be linked directly to the 
UC. 

60. RONALD CALDERON told the UC that switching the source 
of the payments was fine and that they could simply draw up 
another contract listing JESSICA CALDERON as the UC's personal 



- 43 - 



assistant. The UC gave RONALD CALDERON a third check for $3,000 
with JESSICA CALDERON' s name written on it at the restaurant, 
who still had done no work for the UC. RONALD CALDERON told the 
UC that someday JESSICA CALDERON would be a star for the UC. 

61, The next morning, September 11, 2012, the UC received 
an email from RONALD CALDERON asking, " [UC] . So which name do 
you like? California Independent Film Producers, California 
Coalition of Independent Film Producers, California Association 
of Independent Film Producers, United Independent Film Producers 
of California. Feel free to add to or make suggestions!" 

62. The UC responded, "Can it be United Pacific 
Independent Producers of California? That will signal to [UC-3] 
that you are helping us on this project. I haven't thought of 
what address to use, any ideas? Lastly, once we have . a final 




draft, can you FedEx to me on your letterhead before I take off 
for Spain?" 

63. The UC received a response from RONALD CALDERON 
saying, "Not necessary. [Your investor] will know the 
connection. Better to go with, United Independent Film Producers 
of California or United California Independent Film Producers." 
The UC received a separate email from RONALD CALDERON saying, 
"Let's use your studio address and your name as Executive 
Director?" 



- 44 - 



64. Shortly thereafter, the UC received an email from 



RONALD CALDERON containing the first draft of the letter: 

it" 

Dear [UC] , It is with great pleasure that I 
inform you that my Senate Bill SB 1197 passed both 
legislative houses and is awaiting signature by 
Governor Jerry Brown. However, it is with regret that 
I was not successful this time in lowering the film 
production budget threshold to below $1,000,000. 
That's the bad news, but the good news is that I have 
made great progress in moving this agenda forward with 
the support of the movie and television industry. I 
greatly value the contribution that smaller 
independent films add to the California jobs market 
and to the California economy. Small businesses are 
the backbone of this economy and I believe the 
legislature should make great effort in recognizing 
this fact. Therefore, it is with great enthusiasm 
that I share with you my commitment to providing 
smaller budget film tax incentive in the form of 
production tax credits. This will be my primary focus 
over the next 2 year legislative session. I thank you 
for your support in advance in carrying this agenda 
forward and look forward to working with your 
organization in the future. (Emphasis added.) 

65. Before making any changes to the first draft of the 
letter, the UC wrote back, "I am ok with not using [the UC 
studio's name] in the title if you list [my investor] and I as 
the Executive Director. I was just a little concerned about 
being sure no one else is using the names you mentioned. I know 
for [the UC studio] , I am the only one...." 

66. The response from RONALD CALDERON was, "Ok. Will make 
the changes. Did you read the draft?" 

67. The UC responded, "Ron, I made a few slight changes. 
As we discussed last night, your willingness to propose 



- 45 - 



legislation that would bring it down to $750,000 is very 
important to [my investor] . [He] understands and I have made i 
clear in the letter that you are not promising it will pass. 
The fact that you propose it, is what is important. If we can 
keep these changes , it will be exactly what I need. Thanks RC ! 

68. The response contained the following revisions to the 

first draft of the letter: 

Dear [UC] , It is with great pleasure that I 
inform you that my Senate Bill SB 1197 passed both 
legislative houses and is awaiting signature by 
Governor Jerry Brown. Although J was not successful 
this time in lowering the film production budget 
threshold to $750,000 for independent films, I have 
made great progress in gathering the support of the 
movie and television industry for such legislation. I 
know lowering this threshold will greatly benefit 
smaller production companies in California and 
increase the number of jobs added to the California 
economy . Small businesses are the backbone of 
California's economy. and I believe the legislature 
should make great effort in recognizing this fact. 
Therefore, it is with great enthusiasm that I share 
with you my commitment to proposing legislation that 
would either directly or indirectly lower the film 
production budget thresholds for independent films to 
$750,000. The economic benefit this will bring to 
California's economy has made this my primary focus 
over the next two year legislative session. I thank 
you for your support in advance in carrying this 
agenda forward and look forward to working with your 
organization in the future. (Emphasis added.) 

69. The UC received an email from RONALD CALDERON saying, 
" [UC] , I will have letter ready tomorrow afternoon. Do you want 
to just pick it up from me or mail to you?" After a series of 




emails with RONALD CALDERON, the UC and RONALD CALDERON 



eventually agreed to have JESSICA CALDERON drop off the letter 
in an envelope at the UC's apartment in Los Angeles. 

70. On September 12, 2012, the UC received a forwarded 
email from RONALD CALDERON. The email was originally sent from 
RONALD CALDERON to RONALD CALDERON' s secretary and niece, 
Michelle Pyne (Michelle.Pyne@sen.ca.gov) on September 11, 2012, 
with the following instructions: "For the letter use United 
Independent Film Producers of California, And address letter to 
[UC] and [UC's investor], both Executive Directors. I will next 
forward you the mailing address." 

71. On September 12, 2012, RONALD CALDERON sent an email 
instructing Pyne to make the following correction to the letter: 
"Correction to who to address in letter. Address letter to [UC] 
as Chairman and CC [UC's investor] as Executive Director. Please 



acknowledge . " 



72. On September 28, 2012, the UC mailed a check for 
$3,000 with JESSICA CALDERON' s name written on it to RONALD 
CALDERON' s residence in Montebello, California. 

73. On October 2, 2012, the UC received an email from 

m 

RONALD CALDERON stating that JESSICA CALDERON was on hand "24/7" 
if the UC needed her. On or about October 4, 2012, the UC sent 



- 47 - 



an email to RONALD CALDERON saying, among other things, "we can 
definitely discuss [JESSICA CALDERON] when I get back." 8 

•74. On October 23, 2012, the UC received an email from 
jessicacalderon@aol.com stating, among other things, "Just want 
to thank you for all you are doing and also want to set up a 
meeting with you and [a celebrity's son] for future possible 
opportunities to collaborate with your studio for future 
projects. Also wanted to reach out to you about wanting to be a 
possible contributor of our Skate World Revolution. . .Would love 
to come by the studio and help out in any way that I can. I am 
available Mondays, Thursday, Fridays. . . Sincerely [JESSICA 
CALDERON] . " 

75. The following day, on October 24, 2012, the UC met 
RONALD CALDERON for dinner at a restaurant located in downtown 
Los Angeles. During the meeting, RONALD CALDERON asked the UC 
if he could give JESSICA CALDERON a task just so that she had 
something to do. The UC reminded RONALD CALDERON that he did 
not hire JESSICA CALDERON to do work and had hired her for the 
tax credit legislation. The UC said there was no work for 
JESSICA CALDERON to do at the studio. RONALD CALDERON asked the 
UC if she could just do something for the purpose of 
"legitimizing the whole thing." RONALD CALDERON said he was 

The UC was in Spain at the time of this email exchange and 
had informed CALDERON. 



- 48 



feeling guilty and that just having her run something across 
town would be enough, just so something was on record. The UC 
told RONALD CALDERON he would keep an eye out for upcoming work 
and would let RONALD CALDERON know. The UC asked RONALD 
CALDERON how he should respond to the email he had received from 
JESSICA CALDERON. RONALD CALDERON told the UC to tell JESSICA 
CALDERON that he wanted to meet the celebrity's son and to say 
he (the UC) wanted more information about the skate park. 

76. On October 26, 2012, the UC received an email from 
JESSICA CALDERON, which she sent using the email account 
icumanana@aol . com . CALDERON told the UC that if he was 

interested in purchasing a liquor license for the UC studio, the 



type of license he was looking for was a "Type 48" license. 
JESSICA CALDERON explained that " [b] y going to design school 



lowledge 



[she had] gained the knowledge and the resources on building and 
regulations for creating commercial restaurants/bars/night 
clubs." She added, "Please use this to your advantage since I 
work for you." The UC responded, "Hi [JESSICA CALDERON], I 
already have someone looking into this issue, thanks." 



The UC had previously told RONALD CALDERON and THOMAS CALDERON 
that he was interested in obtaining a liquor license for the UC 
studio, but it was not something he had shared with JESSICA 
CALDERON. 



49 - 



iv. The Trips to Las Vegas 

77. On October 16, 2012, the UC met RONALD CALDERON and 
THOMAS CALDERON for dinner. Before their meeting, the UC 
received an email from RONALD CALDERON stating, "I have a 
surprise guest meeting us tonight." When the UC arrived to the 
dinner, RONALD CALDERON explained that the surprise guest was 
supposed to be Senator de Leon. However, after speaking with 
Senator de Leon on the telephone, RONALD CALDERON informed the 
UC that Senator de Leon would not be joining them for dinner. 

78. On October 24, 2012, RONALD CALDERON and the UC had 
lunch in downtown Los Angeles. During the meeting, RONALD 



CALDERON told the UC that he was upset that Senator de Leon had 

■ 



up, 

not shown up for dinner on October 16, 2012. RONALD CALDERON 



said that Senator de Leon wanted to be the next Senate Pro Tern 



and that the UC would want to have a good relationship with him 
as the next leader of the Senate. The UC asked RONALD CALDERON 
if helping Senator de Leon would help RONALD CALDERON. RONALD 
CALDERON said that it would because Senator de Leon could be 
extremely helpful in getting RONALD CALDERON several 
appointments, such as an appointment to the Unemployment Board 
or the Board of Equalization. 

79. On October 25, 2 012, the UC met RONALD CALDERON and 
Senator de Leon for dinner at a restaurant in downtown Los 
Angeles. During the meeting, they discussed the tax credit 

- 50 - 



legislation and an amendment that would lower the threshold to 
$750,000. At the end of the meeting, after Senator de Leon had 
left, RONALD CALDERON told the UC that Senator de Leon liked the 
UC. The UC asked RONALD CALDERON whether donating to Senator de 
Leon would help RONALD CALDERON, When RONALD CALDERON indicated 
that it would, the UC told RONALD CALDERON that because it 
sounded like Senator de Leon supported the legislation the UC 
would support Senator de Leon . 

80. On October 29, 2012, the UC received an email from 
RONALD CALDERON asking if the UC was having any luck arranging a 
trip to Las Vegas for RONALD CALDERON to celebrate Halloween. 
After exchanging several emails regarding the trip to Las Vegas 
and the UC's ability to attend, the UC wrote back, "I'll call 
you tonight with more details but I have a VIP table for you at 
the Bank for Wednesday. Nelly is hosting/performing and you've 
got a front row seat on the action!" 

81. On October 30, 2 012, the UC contacted RONALD CALDERON 
on the telephone and told RONALD CALDERON that he had paid 
$4,000 to reserve the VIP table for RONALD CALDERON at the Bank, 
a nightclub in Las Vegas, on Halloween night. The UC told 
RONALD CALDERON that he would not be able to attend the trip. 
Towards the end of their conversation, RONALD CALDERON asked 
about JESSICA CALDERON' s paycheck by asking the UC, "And then uh 
as far as the monthly thing, you're going to take care of that 



- 51 - 



or you want to give it to me Friday?" The UC responded, "Yeah. 
Yeah. Uh, you know what, I didn't even think about it. We're 
already coming up on it aren't we?" The UC asked RONALD 
CALDERON if he could bring "it" with him to their next meeting 
(November 2, 2012) and RONALD CALDERON said, "Why don't you 
bring it Friday, that way you don't have to mess with the mail." 

82. Shortly after their telephone conversation ended, the 
UC received an email from RONALD CALDERON. The email said, 
" [UC] , I'm feeling really bad about you not being at the club at 
so much expense! The c h.e c l^i for [JESSICA CALDERON] is much more 
of a priority for me. Please don't hesitate to cancel. I 
totally understand. Let me know what you decide." The UC 
responded, "Hey [RONALD CALDERON], seriously not a big deal. 
You've done so much for [the UC studio] , I was feeling bad that 



they didn't have a better table. Nevertheless, if you feel 
uncomfortable, I can still cancel. Just let me know." The UC 
later received an email from RONALD CALDERON saying, "Ok well I 
forgot I had talked it up to some friends Saturday and now they 
are looking forward to it so I sheepishly will take you up on 
your offer and take the table at the Bank." 

83. On November 1, 2012, the UC received several emails 
from RONALD CALDERON containing photographs apparently taken 
from the VIP table at the Bank, including a photograph taken 
with two individuals who appear to be rappers Nelly and T.I. 

- 52 - 



(Exhibit 1.) One of the emails said, "Our view from our 
table." 10 

84. On November 2, 2012, the UC met RONALD CALDERON for 
dinner at a restaurant in downtown Los Angeles. During the 
meeting, RONALD CALDERON told the UC that none of the people he 
had invited to Las Vegas showed up, so he flew one of his 
employees out to meet him. RONALD CALDERON said that Senator de 
Leon was "onboard" with the tax credit legislation and that "if 
s want to get it through next year we are gonna need his help 




and he will support it." However, California Governor Jerry 



Brown had asked RONALD CALDERON not to bring up the tax credit 
legislation until after the election was over because of 
Proposition 30, a ballot measure sponsored by the Governor that 
sought voter approval for a different tax increase. After, 
having dinner, the UC and RONALD CALDERON walked back to the 
UC's apartment to have a cigar. The UC gave RONALD CALDERON a 
check for $3,000 with JESSICA CALDERON listed as the payee. The 
UC told RONALD CALDERON he was trying to be discreet. RONALD 
CALDERON thanked the UC. 

85. On November 20, 2012, the UC met RONALD CALDERON for 
dinner at a restaurant in downtown Los Angeles. At one point 



10 On November 8, 2012, the UC received an email from the 
Director of VIP services for the Light Group, an entertainment 
group which owns a series of clubs in Las Vegas. It contained 
an itemized copy of the charges incurred at the Bank on October 
31, 2012, which totaled $3,939.56 for the entire evening. 



- 53 - 



during the meeting, RONALD CALDERON advised the UC to have lunch 
with JESSICA CALDERON sometime or to invite her to tour the UC 
studio. The UC reminded RONALD CALDERON that hiring JESSICA 
CALDERON was never about that. RONALD CALDERON said, "I know, I 
know, it never was, but you know you can understand how she 
feels. She's the recipient of most of that and she's like *I 
feel guilty cuz I'm not doing anything' you know, but just to 
make her feel, recognize what she does." Afterwards, the UC 
provided RONALD CALDERON with another check for $3,000 with 
JESSICA CALDERON listed as the payee. 



86. On December 4, 2012, RONALD CALDERON contacted the UC 



and 



over the telephone and told him that Senator de Leon was having 
a fundraiser in connection with the Manny Paquiao fight in Las 
Vegas on December 8, 2012. RONALD CALDERON said that in 
exchange for a donation of $10,000, the donor would receive two 
tickets to the fight and VIP accommodations at a Las Vegas 
hotel. RONALD CALDERON asked the UC if he was interested in 
paying for RONALD CALDERON and the UC to attend the event and 
said, "if you can't go I'll take my brother Tom or somebody, but 
I'd rather - I'd rather you first take a shot at it." The UC 
told RONALD CALDERON he would have to get back to him with an 
answer. 

87. Later that day, the UC sent an email to RONALD 
CALDERON saying, "As [you] know, we have the $750K legislation 



54 



coming up, and it's probably the businessman in me, but I think 
we can get something in return for supporting [Senator de Leon] 
in this event. Inasmuch as I would love to just send you and 
[THOMAS CALDERON] to Vegas this weekend, I want to make sure 
that [Senator de Leon] knows we expect his support for the 
legislation if you attend. Is there any way we can do that? It 
just doesn't make good business sense if we do not get some 
assurances from [Senator de Leon] before we commit. I don't 



want to put too much in an email... 




88. The UC received an email from RONALD CALDERON that 



said, " [UC] ! It doesn't work that way. You cannot have a quid 
pro quo discussion with a legislator. However, I am sure he 
will appreciate your support very very much. Also, keep in mind 



he has always been supportive of anything that will further 




opportunities for minorities. At the end of the day you are 
investing in the future leader of the Senate whom you are 
building a very good relationship. He is also my very good 
friend and has always supported me and my efforts. Also keep in 
mind [Senator Steinberg] is still leader and is on the same 
page. Therefore, I recommend yes. But it's your call." 

89. The UC responded, "I guess I just want to feel more 
comfortable that [Senator de Leon] knows who I am, what [the UC 
studio] is about, and that he's on the same page." 



- 55 - 



90. The UC received another email from RONALD CALDERON 
that said, "I will make sure you get some quality time with 
[Senator de Leon] this weekend. It takes more than one meeting 
to get to know someone. Look at us! This is a way of showing 
[Senator de Leon] you want to develop a solid relationship. I 
need to know ASAP. Just trust me. He hangs tough with his 
friends ! " 

91. On December 5, 2012, the UC met RONALD CALDERON for 
dinner at an event honoring a California State Assemblyman. The 
UC asked RONALD CALDERON when there would be hearings on the 
$750,000 amendment to the tax credit legislation. RONALD 
CALDERON said the only agreement they had with Governor Brown 
was not to hold any hearings until after the election, so now 
they could do whatever they wanted. RONALD CALDERON told the UC 
he had until January 28, 2013 to get the bill in, but after that 
he could still introduce a spot bill. RONALD CALDERON explained 
that spot bills were bills you could set aside as a vehicle for 
legislation. RONALD CALDERON said he felt they probably would 
not need to use a spot bill. 

92. The UC apologized about his earlier emails regarding 
Senator de Leon's fundraiser and said it was not about the 
money. RONALD CALDERON told the UC that he was using RONALD 
CALDERON' s capital with Senator de Leon and that Senator de Leon 
would be onboard with the tax credit legislation because the UC 



56 - 



was with RONALD CALDERON. RONALD CALDERON said Senator de Leon 
would not do anything to hurt the $750,000 amendment, but that 
"he's got a lot of people asking for favors, not just [RONALD 
CALDERON] . " RONALD CALDERON said he received a call from 
Senator de Leon's fundraiser and they needed to know the UC's 
answer by the following day. Later that evening, RONALD 
CALDERON told the UC that THOMAS CALDERON did not know RONALD 
CALDERON was helping the UC and indicated that THOMAS CALDERON 
would be upset if he knew because the UC had not returned THOMAS 
CALDERON' s calls regarding hiring THOMAS CALDERON as a 
consultant. RONALD CALDERON said he told THOMAS CALDERON the UC 
was not saying no and that it was just a matter of when. 

93. The following day, on December 6, 2012, the UC told 
RONALD CALDERON over the telephone that he would buy one ticket 
to Senator de Leon's fundraiser ( i.e. , make a $5,000 donation), 
but not two tickets as RONALD CALDERON had originally mentioned. 
Later that day, the UC received emails from two individuals who 
identified themselves as partners for a consulting firm hired by 
Senator de Leon. They gave the UC instructions on how to make 
the $5,000 donation, which the UC followed before sending them a 
check for $5 , 000 . 

94. On December 18, 2012, the UC met RONALD CALDERON for 
breakfast at a restaurant in downtown Los Angeles. During the 
meeting, RONALD CALDERON gave the UC a box of cigars and a 



- 57 - 



coffee maker as gifts for the holidays. RONALD CALDERON told 
the UC that the coffee maker, which was still wrapped at the 
time, was from JESSICA CALDERON. RONALD CALDERON told the UC, 
"Well, you know, she knows that you and I are working together 
and she is still the beneficiary of our relationship and she 
feels, you know, like wow, you know, I want to do something...." 

95. On January 2, 2013, the UC received an email from 
RONALD CALDERON. In it, RONALD CALDERON asked the UC if he had 
sent the $3,000 check for JESSICA CALDERON. The UC said he had 
not and asked RONALD CALDERON if he should mail it or bring it 
with him to their next meeting. The UC received an email back 
from RONALD CALDERON saying the UC should just mail the $3,000 



check, which the UC did on January 3, 2 013 



v. 



The Spot Bill 

11, 2013, 



96. On January 11, 2013, the UC met RONALD CALDERON for 
lunch at a restaurant in downtown Los Angeles. During the 
meeting, RONALD CALDERON told the UC that he could get a bill 
number and possibly hearings scheduled for the tax credit 
legislation by the end of January 2013. 

97. On January 15, 2013, FBI SA ^r.^^^ who was 
assigned to the FBI's Sacramento Field Office, met with 



who is unaware of the FBI' s ongoing undercover investigation, 
told SaP^SSSI amon 9 other things, BLv?????i^^ 



58 



that the UC, as well as other smaller production studios , were 
"clamoring" for the $1 million threshold in the tax credit 
legislation to be lowered so that smaller productions could 
benefit from the program. 



100. On March, 11, 2013 RONALD CALDERON called the UC 
and left a voicemail to advise the UC that he just arrived 
in Sacramento and was driving to the Capitol. The UC then 
called RONALD CALDERON and told him that his (the UC's) 
father had just been diagnosed with cancer and that UC 
would be gone for an extended period of time, 11 The UC told 
RONALD CALDERON that UC-3 wanted to meet with RONALD 
CALDERON on March 21 st in Miami, Florida. The UC explained 
that UC-3 was willing to hire THOMAS CALDERON to handle 
things while the UC was away. The UC said that UC-3 was 
also willing to include the $3,000 previously being paid to 
JESSICA CALDERON in his payments to THOMAS CALDERON. 

101. On March 21 , 2 013, RONALD CALDERON and THOMAS 
CALDERON met with UC-3 in Miami to discuss UC-3 hiring 
THOMAS CALDERON. UC-3 asked RONALD CALDERON if he would 
still support the tax credit legislation if UC-3 did not 
hire THOMAS CALDERON. RONALD CALDERON said, "Absolutely, 
you have my support even if you don't hire TOM." However, 
RONALD CALDERON advised UC-3 that if he did hire THOMAS 
CALDERON, it would make the tax credit legislation happen 
faster. RONALD CALDERON told UC-3 that he needed to make 



11 The UC, who was first introduced to RONALD CALDERON in 
February 2012, was in the process of being reassigned to a 
different FBI Field Office located overseas when he placed this 
telephone call . 



- 60 - 



the tax credit legislation look like it benefitted 
everyone . 

102. On March 26, 2013, UC-3 met with RONALD CALDERON 
in Miami. While they were meeting, THOMAS CALDERON called 
RONALD CALDERON on his cellular telephone and RONALD 
CALDERON allowed UC-3 to hear part of his conversation with 
THOMAS CALDERON using his speaker phone. UC-3, RONALD 
CALDERON and THOMAS CALDERON tentatively agreed to allow 
THOMAS CALDERON' s consulting fee to be paid through 
Calif ornians For Diversity. Once the telephone call ended, 
RONALD CALDERON told UC-3 that he needed JESSICA CALDERON' S 
payment for her school. RONALD CALDERON told UC-3 that 



legally it was a problem for UC-3 to pay RONALD CALDERON 



for the tax credit legislation, so he needed the payments 
to go through JESSICA CALDERON. UC-3 and RONALD CALDERON 



discussed ways in which they could make the payments look 
legitimate. RONALD CALDERON asked UC-3 if he would be 
willing to pay $10,000 (instead of just $5,000 for THOMAS 
CALDERON) per month to Calif ornians for Diversity. In 
other words, add JESSICA CALDERON' s $3,000 payment to 
THOMAS CALDERON 7 s payment plus $2,000 because THOMAS 
CALDERON would have to pay taxes on that additional money. 
RONALD CALDERON told UC-3 that THOMAS CALDERON had control 
over the Calif ornians for Diversity account. UC agreed to 



- 61 



think about it. While UC-3 was taking RONALD CALDERON back 



to the airport to catch his (RONALD CALDERON' s) flight to 

California, UC-3 gave RONALD CALDERON a white envelope 

containing $3,000 in cash. 

103. On April 2, 2013, RONALD CALDERON contacted UC-3 

via telephone and suggested that UC-3 should have the 

$10,000, including the $3,000 payments previously going to 

JESSICA CALDERON, go through THOMAS CALDERON' s company, the 

Calderon Group, instead of Calif ornians for Diversity: 

RC: I had gone around and around with different 

options in my head since you and I had 
talked. And I thought I had a solution and 
then I got hit with a. . . uh, you know, 
blindsided. The Latino Caucus, you know, we 
meet every couple of weeks or so, the Caucus 
meets and the Executive Board meets on 
different days, but they had a meeting and 
they had a vote on amending the bylaws . And 
there was also a vote on, you know the Chair 
is changing some policy, and he wants to be 
a little more autonomous than having to get 
a 2/3 vote for every move that we make. So 
on consultants for committees, so they have 
3 committees and I have the one committee, 
but the 1 committee that you and I have been 
discussing, the Calif ornians for Diversity, 
is tied into the Latino Caucus in terms that 
it's being sanctioned by them and that's why 
I'm able to raise the money for the purpose 
of promoting numbers in the Caucus. So, the 
bylaw was changed that he's got authority on 
any consultants that are hired that are paid 
over $5K a month. So anything under 5 
there's no vote involved and there's no... 
the Chair's not involved. 

UC-3: Wait, who has authority? Tom or you? 



- 62 - 



No, the Chair of the Caucus. In other 
words, he has to authorize anything over 
$5K. So right now, Tom is already getting 
$5K a month from the Caucus, from our 
committee. For us to add to that - number 
one, it T s going to bring too much attention 
to us in what we're doing and right now 
we 1 re in a fundraising mode. And number 
two, then I have to go and get permission 
from the Chair to get more and I don't want 
to have do that. So doing any more. . .that, 
that - it just brings too much attention. 
So the other option I had. . . So then I 
figure I got to. talk to Tom and I got to let 
Tom know what our arrangement is . The 
arrangement I had with [the UC] , in terms of 
Jessica and if he would be willing to pay 
her from that. So we went back and forth 
and he said if he does, and he gives her 
cash, there's some tax liability on his part 
that he's going to have to absorb. He'll 
probably just say, I'm making "X" amount a 
month and he's going to pay taxes on that 
regardless of what he gives to Jessica. So 
you and I had talked. . .Tom and I talked 
about 5, he mentioned expenses and maybe an 
additional 1,500 or 2,000 on top of that. 
And then the 3 that Jessica was already 
making on contract comes out to an even 10. 
The cleanest thing would be, you have direct 
contract as a consultant on the film 
making... on the film credit project. You 
could do it anyway you want to do it monthly 
or 6 months, he doesn't care. Make it a 
straight 10 to him, he'll do the 3 directly 
to Jessica and it's all clean. It's all up 
and up. It's business. I know you were 
hoping for the non-profit side... it's just 
not , . . 

Yeah, I would have enjoyed the tax break. 
Honestly, I was prepared to do the quarterly 
at 10 with you on that. I really wanted to 
have that little bit of distance between you 
and I. You understand what I'm saying? 
Just to keep things - the appearance of 
things to be a little more clean. 



Your contract is with Tom and I have nothing 
to do with his company and his consulting 
firm. And he does consulting in the 
healthcare industry, in the insurance 
industry, the water industry. He's just an 
all around business consultant. 

So now, he's on board with the Jessica 
thing. So I can talk freely with him about 
that now? 

Yes, yes. 



Ok, alright. . . I'm looking out for you 
brother. I didn't want to step on any toes. 
And I didn't know how he was going to feel 
about that. So as long as everything's out 
in the open. . . That makes me feel a lot 
better, by the way, that we're all on the 
same page and we don't have to keep, any 
secrets, because, obviously this is 
important to all of us . 

It's all out now. For me, it's nothing 
against my brother. I love my brother, but 
it was none of his business.. It was 
something that me and [the UC] negotiated 
directly and it had nothing to do with Tom. 
I didn't see any reason to bring it up, but 
since I couldn't find any other options I 
thought, ok, well let's lay it all out and 
make it (UI) so we could make it work. 

Alright, so where exactly are we with the 
legislation? I know last time we talked you 
said something would happen through a 
subcommittee in April, right? 

Yeah, we don't have a committee. It's not 
assigned to the committee yet , so it ' s not 
on the (UI) to be heard yet cause I'm still 
working on it. So all I've been doing 
between - since I saw you and now is talking 
to - trying to get some people together. 
Get the coalition together. Get leadership 
behind me, so that when I hear the bill I 



get the support I need to get out of 
committee. And that's going well. I 1 11 be 
able to get it out of committee, that won't 
be a problem. 

104. RONALD CALDERON has advised UC-3 that he is 

attempting to have Senator Ted Lieu add the $750,000 

amendment to a bill (SB 370) Senator Lieu recently 

introduced in the California Senate, which would create a 

tax incentive for companies that produce commercials in 

California. On April 26, 2013, I visited the website 

www.leginfo.ca.gov, a website hosted by the State of 

California, and learned that on February 19, 2013, RONALD 

CALDERON introduced Senate Bill ("SB") 317 ("the spot 

bill"). As of this date, substantive language has not been 

added to the bill. I further learned that no language 

relating to the $750,000 amendment to the tax credit 

legislation has been added to Senator Lieu's SB 370. On 

May 2, 2012, I again visited www.leginfo.ca.gov and learned 

that a previously scheduled committee hearing on the bill 

had been cancelled by the bill's author on May 1, 2 013. 



D. RONALD CALDERON HIRING UC-2 AS A LEGISLATIVE 
STAFFER 

i . . The $5 0,000 Special Fund 
105. On June 21, 2012, when RONALD CALDERON and the 
UC were having dinner at a restaurant in Pico Rivera and 
RONALD CALDERON first asked the UC to hire JESSICA CALDERON* 



as an employee, see supra f 24, RONALD CALDERON had 

indicated that he was willing to hire the UC's girlfriend 

(UC-2) if the UC hired JESSICA CALDERON. RONALD CALDERON 

told the UC he would do this because "[i]t helps both of 

[them] . " Id, RONALD CALDERON made similar offers to hire 

UC-2 after this meeting. 

106. On October 16, 2012, as they were leaving dinner, see 

supra H 77, the UC took RONALD CALDERON up on his offers. The 

following is an excerpt from the draft transcript of that 

recorded conversation: 

UC You remember when we talked last time 

where... .my place. 

RC Yeah, 

UC And you talked about the potential for 

bringing her in. 

RC Right , right , right . 

UC Do you still have any availability in 

your office? 

RC Well, I had a spot. And, I.... There is 

a will, there is a way. So, put it 
that way. 

UC Okay . 

RC So. If you wanna give her a shot in 

the district, I will see what I can do. 

UC Okay, Let me kind of spell it out, 

RC Yeah . 

UC So, her modeling thing... 

- 66 - 



Yeah. 

...isn't working out the way she wanted 
it to. 

Okay. 

She is a little discouraged, 
Yeah. 

And, it would mean, I think, a 
wonderful world to her if you talk to 
her on the 28th and were able to say, 
hey, we'd love to have you. Come in, 
work for us. 

Okay. All right. 

She comes with, you know, issues. 
Yeah. 

It is not a big thing. But, if you are 
willing to take that on... — 

Every girl has issues, 

And, I don't want you to think that I 

am forgetting about you for 

doing.... cause this is huge for me* That 



oj E|| 1} 

I am flush right now. 



It's a good idea right? Good idea! 
It was outstanding. Your idea was 



At some point , you're gonna have to 
form that association. 

I am sure I will. 



[Laugh] , 



[Laugh] , 

We will have to make it 

I'll tell you how good it is, I told 
you about how they were willing to pad 
the budget little bit for potential 
consulting or" whatever it is... 

Yeah, yeah, yeah. Right, 



So, three picture deal gives me $50,000 
for each year for three years. To do 
whatever I want. 

Oh, nice. 

Whatever I want for that $50 , 000. So, 
I wanna talk to you about what I can do 
with that $50,000. 

Okay. 

So.... 

You mean, on top of what you are 
already doing for us . 



Okay, ^_ 

I mean, if there is something that you 
think that I can do to help you out 
with that fifty each year, you tell me. 
And, I will set it up. 



If it means 
is. Think about it. 



Yeah. 



But, doing this for [UC-2] ... 



Yeah. 

is a huge, huge deal for me. And, it 
would help me out tremendously. 



Cause, it is kind of a, kind of a 
bus ines s trip , too , 



So, I will work out a strategy and will 
make it happen. 

You think...this is still that same job 
with,.. 

Yeah, yeah, yeah. 

„,with benefits and all that stuff? 

Yeah, No. I will just have to. Look, 
I am in so tight with the pro ^t em to 
do.... He will do whatever I want. But, 
you know, I gotta make [01]. ..make it 
I think [UI] do it. 

I will make it worthwhile, I 
appreciate it. 




No problem, man . 
I do. I really do. 



All right. All right, 
; , man ■ 



- 69 - 



107. On October 24, 2012, when RONALD CALDERON and the UC 
met at a restaurant in downtown Los Angeles, see supra H 78, 
RONALD CALDERON told the UC what progress he had made on getting 
UC-2 a job. RONALD CALDERON said j^T^ 

it would have to be a "special ask" made to Senator 
Steinberg. RONALD CALDERON said he did not think it would be an 
issue. RONALD CALDERON told the UC that UC-2's salary would be 
part of the budget and that there had been an article in the 
newspaper about how RONALD CALDERON was paying staff that did 



not meet very often. 12 The UC told RONALD CALDERON that getting 
UC-2 a job would be a huge favor and in return the UC had the 
"special fund" that he was still looking for ideas from RONALD 
CALDERON on how to spend. 

108. On October 29, 2012, the UC sent an email to RONALD 
CALDERON advising that he (the UC) may have a meeting with his 
investor and receive the first $50,000 transfer he had 
previously mentioned. See supra % 106. RONALD CALDERON 
responded, "Nice! I have a x small ask' of you in that regard 
next time we have a chance to meet." 



12 On August 12, 2 012, a Sacramento newspaper published an 
article pointing out that California's Senate Select Committee 
on International Business Trade was staffed with three employees 
whose combined salaries cost taxpayers more than $170,000 a 
year, yet it had not met even once in the past two years, and 
its only member was its chairman, RONALD CALDERON. See 
"California Legislature's 'Select Committees' Cost A Lot With 
Little Accountability," Sacramento Bee (August 12, 2012). 



70 - 



ii . The $5,000 Payment for Zachary Calderon' s Tuition 

109. At their next meeting, which took place on November 
2, 2012, see supra % 84, RONALD CALDERON brought up the $50,000. 
RONALD CALDERON told the UC, "this particular semester coming 
up, for Zach, urn, they raised the fees and my salary is going 
down in December another five percent... I was gonna ask you one 
of two things. One, urn, I need 5, I'm gonna be short 5..." 
RONALD CALDERON then told the UC, "we could do a loan, that 
would be easy, and I could pay you back in March, the other is, 
this , this 50,000 that you, you' re trying to set aside for 
whatever purposes maybe we could... maybe we can get a $5,000 
check to Berklee College of Music and Zach just turns it in." 

110. The UC told RONALD CALDERON that he was okay with 
paying the $5,000 towards the tuition, but said it would only 



the $50, 000. 



put a small dent in the $50,000. RONALD CALDERON mentioned 
several different accounts into which he was considering having 
the UC deposit the remaining money (Calif ornians for Diversity, 
Senator de Leon, Ronald Calderon for Controller, Ronald Calderon 
Officeholder, and a Los Angeles City Councilman) . The UC told 
RONALD CALDERON to spell out where he wanted the money to go on 
a piece of paper and the UC would do it. It was around this 
time that RONALD CALDERON told the UC he should be able to get 
UC-2 a job in January 2013. 



- 71 - 



111. On November 20, 2 012, when the UC met with RONALD 
CALDERON for dinner at a restaurant in downtown Los Angeles, see 
supra % 85, the UC asked RONALD CALDERON about UC-2's job and 
gave RONALD CALDERON a $5,000 check for Zachary Calderon' s 
tuition with the payee portion left blank. RONALD CALDERON 
asked the UC if the money was coming out of "the fund" and the 
UC said yes. The UC asked RONALD CALDERON what UC-2 would be 
doing when she came to work for RONALD CALDERON. RONALD 
CALDERON said that Michelle Pyne, one of his staff members, 
would take UC-2 "under her -wing." The UC asked if there was 



sr ner -w: 
do in oi 



anything UC-2 had to do in order to prepare herself for the job 
and RONALD CALDERON said no. 

iii . The Lady Gaga Concert Fundraiser 

112. On December 5, 2 012, while at the dinner event 
honoring a California State Assemblyman, see supra % 91, RONALD 
CALDERON told the UC that he was still working on getting UC-2's 
job and that Senator Steinberg had recently opened up a 
committee, which RONALD CALDERON described as a placeholder. 

113. On December 18, 2012, when the UC met RONALD CALDERON 
for breakfast in downtown Los Angeles, see supra f 94, the UC 
asked RONALD CALDERON whether UC-2 needed to consider the 
possibility of starting a job with RONALD CALDERON when making 
her holiday travel plans. RONALD CALDERON said he was still 
waiting to hear back from Senator Steinberg regarding his "wish 



- 72 - 



list," but he did not think it would be an issue and felt UC-2 
should just enjoy her holiday vacation. 

114. On January 2, 2013, the UC received an email from 
RONALD CALDERON inviting him to a Lady Gaga concert fundraiser 
to benefit "Ronald Calderon for Controller 2014" and "Senator 
Lara for Senate 2016." The email said the fundraiser would be 
held on January 20, 2013 and that RONALD CALDERON was hoping the 
UC and UC-2 could attend. 

115. On January 8, 2013, the UC received an email from 
RONALD CALDERON regarding UC-2's job with RONALD CALDERON. The 
email stated that RONALD CALDERON needed UC-2's resume. After 
receiving this email, the UC contacted RONALD CALDERON via the 
telephone and asked if UC-2 genuinely needed a resume and, if 
so, what should be on it. RONALD CALDERON told the UC he would 
send the UC an application for UC-2 to fill out and that a 



resume was not necessary . 





- 73 - 



iv. The $25,000 Payment to Calif ornians For 
Diversity 

116. On January 11, 2013, when the UC and RONALD CALDERON 
met for lunch in downtown Los Angeles, see supra f 96, RONALD 
CALDERON told the UC that he should be able to hire UC-2 by the 
end of the month. RONALD CALDERON and the UC discussed the 
remaining money in the $50,0 00 fund. RONALD CALDERON told the 
UC he should use part of that money to pay $3,900 for the Lady 
Gaga concert fundraiser on January 20, 2013, and contribute 
$25,000 to a non-profit organization named Calif ornians For 
Diversity, which RONALD CALDERON said was managed by Yolanda 
Miranda, RONALD CALDERON told the UC to save some of the 
remaining money for a trip to Miami, which the UC and RONALD 
CALDERON had previously discussed making so that RONALD CALDERON 
could meet UC-3. See supra % 103. RONALD CALDERON gave the UC 
an envelope setting forth what information RONALD CALDERON 
needed in order to hire UC-2, including, among other things, her 
work history. Afterwards, RONALD CALDERON invited the UC to 
Sacramento, California to meet Senator Steinberg. 

117. On January 12, 2 013, the UC received an email from 
Yolanda Miranda, the accountant and Treasurer for both the 
Diversity PAC and Calif ornians for Diversity . The email said, 
"Per Senator Ron Calderon here is an invoice from the 

Calif ornians for Diversity Organization. Please let me know if 



- 74 - 



the invoice was for [the UC Studio] ." An invoice for $25,000 
was attached to the email. The invoice identified Calif ornians 
for Diversity as a 501(c) (4) Nonprofit Public Benefit 
Organization . 

118. On January 15, 2013, the UC mailed a letter 
referencing the Lady Gaga fundraiser and a check for $3,900 to 
Ronald Calderon for State Controller, 550 South Hope Street, 
Suite 1900, Los Angeles, California. The UC also mailed a check 
for $25,000 to Californians for Diversity, 728 West Edna Place, 
Covina, California. Two days before the UC mailed the checks, 
he spoke with RONALD CALDERON on his cellular telephone and told 
RONALD CALDERON that before he mailed out the checks he wanted 
to make sure there would be no "curveball" regarding UC-2's job. 
RONALD CALDERON told the UC there would not be and that the UC 
should mail out the checks. On January 15, 2 013, the UC left 
RONALD CALDERON a voice mail on his cellular telephone notifying 
him that the checks were in the mail. That same day, between 
approximately 8:00 p.m. and approximately 9:30 p.m., RONALD 
CALDERON exchanged 12 text messages with THOMAS CALDERON over 
his cellular telephone. The following day, THOMAS CALDERON left 
a voicemail for the UC stating that he wanted to personally 
thank the UC for his contribution to the Californians for 
Diversity and that the money would be used to promote members of 



- 75 



the Latino Caucus and to do some outreach for them as well as 
some issue oriented events. 

119. On March 9, 2013, the UC received an email from 
RONALD CALDERON saying, " [UC] . Can you write a $320 check to my 
State Senate Office Holder account from your special funds 
account so I can cover my air fare to Miami?" On March 10, 
2013, the UC mailed a $3,200 check to RONALD CALDERON' s office 
holder account via United States mail. 




rr _ : m also 

disclosed, among other things, the following: 

a. Calif ornians for Diversity is a charitable arm of 



the Diversity Politi 
b. 

supposed to be used f 
Latino Caucus, 



ction 



Comm 




ittee ("PAC") 



the money it receives is 



aw new members to the 



ach 

c. The money that Calif ornians for Diversity- 
receives basically goes to THOMAS CALDERON in exchange for 
THOMAS CALDERON doing the work. 13 ^mM^m ' 



13 



|reiterated his belief that the $25,000 was 
provided in exchange for RONALD CALDERON agreeing not to fight 
for the Chairmanship of the Latino Caucus and allow Senator Lara 
to become Chair, which has been corroborated. See infra 123 
(b) and (c) . 



- 76 - 



that Senator Lara was the one who approved the transfer of money 
($25,000) from the Diversity PAC to Californians for Diversity. 

believed this had happened even though political 
candidates like Senator Lara are not supposed to control how a 



14 



PAC spends its money and can only make recommendations. 

e. The reason for having the money ($25,000) sent to 
Californians for Diversity was so that RONALD CALDERON and 
THOMAS CALDERON could build up the funds in that account and 
take the money out later. §Sf # jSSSESk Hil T^^mmmmmmmm^^ 



THOMAS CALDERON has the ability to withdraw money 



from Californians for Diversity because he is the Executive 



Director. In fact, THOMAS CALDERON had already withdrawn money 
from Californians for Diversity and said it was for services 
rendered. 



14 On April 1, 2 013, I reviewed California Bank and Trust bank 
records for Californians for Diversity. I observed a check was 
deposited from "Yes We Can, 400 Capitol Mall, 22nd Floor, 
Sacramento, 95814," and was made for $25,000 to the Californians 
for Diversity. The check was dated January 2, 2013. 
Handwritten on the check was "ID 1334930." The memo section 
noted "Latino Caucus Member Development." 



- 11 - 



g. In addition to the $25,000 payment from Senator 
Lara, over the past month, |jri*^^ 



h. UC-2 had no public service experience and her 
last three jobs were modeling, working for the UC studio, and 
working at a fashion studio in New Orleans, Louisiana. 



g. In addition to the $25,000 payment from Senator 
Lara, over the past month, RONALD CALDERON had been encouraging 
STEVE to secure a position for UC-2 on RONALD CALDERON ' s staff. 




this made ^yy^ reluctant to hire UC-2, because she would 

clearly have no idea what she was doing if hired. Moreover, 

there were currently no positions on RONALD CALDERON' s staff and 
^^^^^^^^^^^^^^ 

f fefr wi lll could not simply manufacture one. 

i. On Friday (January 11, 2013), RONALD CALDERON 
told |(lfgjjg|| that he was having lunch with the UC ( see supra ^ 
96, 116) and asked || v jg| what information he |f *m**mj^ would need 
in order to hire UC-2. Then, on Sunday (January 13, 2013), 

.rded UC-2's work history to 



LD CALDERON forwards SFF^fi 
to put in the necessary paperwork to hire UC-2 
immediately. jTfrftq»l| asked RONALD CALDERON if Senator Ste 
had cleared hiring UC-2 and RONALD CALDERON said yes. 

j . On Monday (January 14, 2 013) , ||| lasked 



| j the $25, 000 Senator Lara 
had contributed to Californians for Diversity came from the 
Latino Caucus or the Diversity PAC. that the 

$25,000 came from the PAC and that, in addition to that $25,000 



- 78 - 



15 



According to FBI Analyst $5,000 was paid 

from Calif ornians for Diversity to THOMAS CALDERON' s company, 
the Calderon Group Inc.; however, approximately $25,000 remained 
in the account after this transaction took place 



16 



79 - 



121. On February 5, 2103, the UC and UC-2 received an 
email from RONALD CALDERON saying, "[UC-2], Congratulations! 
Looking forward to working with you. I know you'll prove to be" 
an invaluable asset to this office ! " 

122. On February 15, 2013, UC-2 received a direct deposit 
of $684.77 into her bank account. According to UC-2's bank 
records, the payment came from "Senate st CA des : legpayroll 
I'd: 0000006995 INDN: [UC-2} CO I'd: 9888883698 PPD . » UC-2 has 
done no work for RONALD CALDERON or the California Senate. 17 

123. In addition to the $684.77 payment to UC-2, the 
following events, which took place during my investigation of 
RONALD CALDERON, corroborated several key aspects of 



(RONALD CALDERON' S and THOMAS CALDERON' S 
Control Over Californians for Diversity) 

a. On October 16, 2012, when the UC first 

mentioned paying RONALD CALDERON an additional $50,000 in 

exchange for getting UC-2 a job, see supra 77, 106, RONALD 

CALDERON told the UC about Californians for Diversity: 



.f orn: 
i non- 

r. SC 



do . 



Okay. Yeah. We have this non-profit. It is called 
Californians for Diversity. So, we are gonna build 
this thing up and what it does mainly is issue 
oriented marketing. So, we want to talk about, you 
know...whether Prop-32 or Prop-33 or you know, it is a 
good thing for people, we can put money into that. We 
wanna talk about just in general, you know, a budget 
plan or whatever we can do...issue stuff. Uh... And, then 
Tom and I down the road, we build that up, we can pay 
ourselves. Just kind of make, you know, part of 
living. So, that's something we are probably gonna 

(The Deal RONALD CALDERON Had With Senator 
Lara Over the~ Latino Caucus Chairmanship) 

b. During their meeting on November 20, 2 012, 

see supra K^f 85, 111, RONALD CALDERON told the UC how Senator 
Lara had previously agreed to step down from being Chairman of 
the Latino Caucus to allow RONALD CALDERON to succeed him. 
Senator Lara later changed his mind and wanted to remain as the 
Chairman. This disappointed RONALD CALDERON and he told the UC, 
"Your word is your bond." RONALD CALDERON said the final vote 
would not be until January 2 013 and he was coming up with a 
strategy for how to deal with the situation. 

c. On December 5, 2 012, while at the dinner 



- 81 - 



event honoring a California State Assemblyman, see supra tl 91/ 
112, RONALD CALDERON told the UC that it appeared Senator Lara 
would remain as the Chairman of the Latino Caucus. RONALD 
CALDERON told the UC how he had brokered a deal with Senator de 
Leon. Although RONALD CALDERON was upset about not becoming the 
Chairman, Senator de Leon told RONALD CALDERON that if he 
allowed Senator Lara to keep the position as Chairman, he 
(Senator de Leon) would do the following for RONALD CALDERON: 
(1) give RONALD CALDERON a paid political appointment after he 
left the Senate; (2) give RONALD CALDERON his own 
consultant/ fundraiser, who would remain on the executive 
committee; and (3) give RONALD CALDERON $25,000 in seed money 
from one of the accounts so that RONALD CALDERON could hire 



consultants and do presentations. RONALD CALDERON told the UC 
he accepted the deal. 

d. According to Senator Lara's website 



(sd33.senate.ca.gov), he recently "was elected Chair of the 
23 member Latino Legislative Caucus with a supermajority 



vote . 



E. THE SPINAL SURGERY LEGISLATION 



i . Summary 

124. My investigation has developed probable cause to 
believe that RONALD CALDERON and THOMAS CALDERON were involved 
in a separate bribery scheme with MICHAEL D. DROBOT, the Chief 



82 * 



Executive Officer of Pacific Hospital of Long Beach ("PHLB"). 
In summary, there is probable cause to believe that beginning on 
a date unknown and continuing through to the present, in return 
for payments from DROBOT, RONALD CALDERON and THOMAS CALDERON 
were helping DROBOT enrich himself and PHLB by supporting . 
legislation that would delay or limit changes in California's 
worker's compensation laws, particularly those laws relating to 
the amount of money medical care providers are reimbursed for 
performing spinal surgeries . 

125. DROBOT was willing to pay RONALD CALDERON and THOMAS 
CALDERON to delay or limit changes in California's worker's 
compensation laws because DROBOT and others had conspired to use 
the existing provisions in the worker's compensation laws, as 
well as several other means, to commit widespread health care 
fraud, including paying illegal kickbacks (or bribes) to 
surgeons performing spinal surgeries at PHLB , to the substantial 
benefit of DROBOT, PHLB, and the surgeons who received the 
kickbacks . 18 

126. In exchange for supporting legislation beneficial to 
DROBOT' s financial interests, RONALD CALDERON received 



18 On April 4 th and 5 th , 2013, federal agents from the FBI , IRS, 
USPS, and DCIS executed search warrants at the executive offices 
of PHLB and at other locations related to the health care fraud 
scheme. The search warrants were authorized by United States 
Magistrate Judge Jean P. Rosenbluth on April 3, 2013. See supra 
1 10. 



- 83 - 



approximately $28,000 in bribes from DROBOT. The bribes were 
disguised as payments to RONALD CALDERON' s son, Zachary 
Calderon, who, according to RONALD CALDERON, purportedly worked 
for one of DROBOT' s companies each summer and was paid a salary 
of $10,000 each summer. There is probable cause to believe 
those payments were actually bribes directed to RONALD CALDERON. 
For instance, for the last two years those payments (totaling 
approximately $18,000) were deposited directly into the bank 
account RONALD CALDERON shared with his wife, Ana Calderon; and 
shortly before the most recent payments, RONALD CALDERON sent 




DROBOT two emails, one, dated June 18, 2 012, saying, "Hi Mike! 
Thanks again for the ride up and lunch! So this is a reminder 
for you to arrange ... to divide pay into 2 payments. First one 
due July 19th and second one due August 16 th which will be his 



last day of work. Thanks," and the second, also dated June 18, 
2012, saying, "Mike. Just in case you forgot or didn't know the 
total amount is 10k. " 

127. DROBOT has also been paying THOMAS CALDERON $10,000 
per month in connection with the bribery scheme. Although the 
payments are purportedly for THOMAS CALDERON to acts as DROBOT' s 
consultant in connection with the spinal surgery legislation, 



Moreover, RONALD CALDERON has made it clear to the UC that he 



- 84 - 



and THOMAS CALDERON have been working together to help DROBOT 
with the spinal surgery legislation. 

128. I discuss in more detail in the four sub-sections 
below: (a) in subsection ii DROBOT ' s health care fraud scheme 
and the importance to that scheme of the California worker's 
compensation laws governing reimbursement for implantable 
devices used during spinal surgeries; (b) in subsection iii, 
three bills relating to these California worker's compensation 
laws that there is probable cause to believe were influenced by 
RONALD CALDERON and THOMAS CALDERON; (c) in subsection iv, 
statements by RONALD supporting probable cause to 

believe that he and THOMAS CALDERON sought to influence these 



bills in return for payments f 



rom DRi 



OBOT; and (d) 




ii , DROBOT' s 



1CCLX L. 11 VwGL. 



:e Fraud 



Scheme 

129. According to the website www.phlb.com, DROBOT is the 
Chief Executive Officer of PHLB , which is located in Long Beach, 
California . 

13 0. According to the Wall Street Journal, PHLB primarily 
services California's workers' compensation patients who require 
spinal fusion, a surgical procedure that joins two or more of 



- 85 - 



the patient's vertebrae. See "In Small California Hospitals, 
the Marketing of Back Surgery," Wall Street Journal (February 9, 
2012) . Between 2008 and 2010, PHLB performed more workers' 
compensation related spinal fusion surgeries than any other 
California hospital, beating out much larger and more reputable 
hospitals such as Cedars Sinai Medical Center in Los Angeles. 
Id. 

131. On or about August 9, 2010, the FBI began 



investigating DROBOT for health care fraud. On or about 
November 30, 2 012, I spoke with FBI SA P^ ^^,^^^ the agent 
assigned to the DROBOT investigation, and learned the following: 



a. One of the reasons PHLB became a leader in spinal 



fusion surgeries was because DROBOT and others known and unknown 
to the government had conspired to, among other things, pay 



conspired to, 
bribes) to th< 



illegal kickbacks (or bribes) to the surgeons performing the 
spinal fusion surgeries at PHLB. 

b. Spinal fusion surgeries paid for under 
California's workers' compensation program were extremely 
profitable to DROBOT because California's workers' compensation 
laws allowed DROBOT to seek separate reimbursement from the 
State Compensation Insurance Fund ("SCIF") and other insurance 
providers for the costs of the implantable medical devices used 
during the spinal surgery. Rather than requiring DROBOT and 
others to submit a single reimbursement form for the overall 

- 86 - 



cost of the spinal fusion surgery, California law permitted 
DROBOT to submit separate reimbursement forms for the surgery 
itself and for the costs of the implantable devices used during 
that surgery . 

c. Under California law, the cost of the 
implantable devices was viewed as a "pass through' 1 expense. As 
a result, SCIF and other insurance providers would reimburse for 
the implantable devices at no more than $250 over the cost of 
what the hospital paid to purchase the implantable devices, as 
documented by an invoice for the implantable devices submitted 
by the hospital. 

d. DROBOT used this aspect of California's worker's 
compensation law, as well as several other means, to commit 
large scale health care fraud. In summary, DROBOT and others 
would submit inflated invoices for up to ten times the actual 
costs of the implantable devices used in the spinal surgeries. 
These inflated invoices purported to be from third party 
vendors. In actuality, however, DROBOT and others purchased the 
devices from related persons and entities who inflated the costs 
of the devices so that the inflated invoices could be submitted 
for reimbursement to SCIF and other insurance providers. When 
the claims for reimbursement for inflated costs were paid, 
DROBOT used a portion of the proceeds to pay the physicians 



87 - 



performing the spinal fusion surgeries kickbacks of 



approximately $10,000 to $20,000 per surgery 



19 




DROBOT's financial interest in spinal surgery legislation was 
evidenced in the Wall Street Journal article. It states that 
the California Workers' Compensation Institute, an insurer's 
group, estimated that the provision of the workers' compensation 
law that allowed separate billing for implantable medical 
devices, hardware, and instrumentation added $55 million to the 
cost of the workers' compensation program in 2008 alone. In 
2010, California's Workers' Compensation Institute ("CWCI") 
estimated that spinal implant pass -through payments topped $67 
million in 2010, up 22 percent from 2008. 



iii . Three Pieces of Legislation and Their Potential 
Impact on DROBOT's Health Care Fraud Scheme 

132. I have been able to identify three pieces of 

legislation introduced in the California legislature relating to 

the DROBOT bribery scheme. 21 I have researched these pieces of 

legislation using the website www.leginfo.ca.gov and have had 

several conversations relating to these pieces of legislation 

ctive 



with a detective for the California 

Department of Insurance. Detective '^ gy—JC| has been assisting 
SA I ^^Ajl in his health care fraud investigation and works 



regularly with California's worker's compensation laws. Based 
on my research, and my conversations with Detective and 
SA [ ffiSB^ i have learned the following regarding these three 



pieces of legislation 
Bill #1 



On February 28, 2 011, Senator de Leon introduced a 



piece of legislation ("Bill #1"). As originally drafted, Bill 
#1 would have eliminated the ability to seek separate 
reimbursement for the cost of implantable devices used during 
spinal surgery, thus eliminating a primary basis of DROBOT's 
health care fraud scheme. In particular, as originally drafted, 
Bill #1 would have amended Section 5318 of the Labor Code, the 
provision of the workers' compensation law that allowed DROBOT 



21 My investigation is still ongoing and thus I may uncover 
other legislation related to the DROBOT bribery scheme. 



89 - 



and others to seek separate reimbursement for implantable 



medical devices used during spinal fusion surgeries, as follows: 

Section 5318 of the Labor Code is amended to read: 
5318. (a) Implantable Spine surgeries with implantable 
medical devices, hardware, and instrumentation for 
Diagnostic Related Groups (DRGs) . . . shall be 
reimbursed to the performing hospital at the rate of 
1.8 times the applicable DRG rate, with no separate 
reimbursement for any implantable devices, hardware, 
or instrumentation . (Emphasis added. ) 

b. On April 27, 2 011, Senator de Leon amended 

Bill #1 to remove the language eliminating separate 

reimbursements for implantable devices. The amended. Bill #1 

would have continued to allow separate reimbursements for 

implantable devices so long as, in most cases, the total 

reimbursement to the provider did not exceed two times a 

specified reimbursement rate for the surgery as a whole. In 

particular, as amended, Bill #1 would have amended Section 5318 

to read as follows, retaining language authorizing separate 

reimbursement based on documented costs of implantable devices: 

Spinal surgeries with implantable medical devices, 
hardware, and instrumentation as defined by Medical 
Severity Diagnostic Related Groups (MSDRGs) ... shall be 
separately reimbursed at the provider's documented 
paid cost , plus an additional 10 percent of the 
provider's documented paid cost, not to exceed a 
maximum of two hundred fifty dollars ($250) , plus any 
sales tax and shipping and handling charges actually 
paid. Unless the case qualifies for outlier 
reimbursement, total payment to the provider shall not 



- 90 - 



exceed 2 times the applicable MSDRG rate. 22 (Emphasis 
added. ) 

c. Based on the evidence discussed in 
subsections iv and v below, there is probable cause to 
believe that Senator de Leon amended Bill #1 to remove the 
language eliminating separate reimbursements at the request 
of THOMAS CALDERON. As discussed in subsection iv below, 
there is probable cause to believe that Senator de Leon 
allowed Bill #1, as amended at the request of THOMAS 
CALDERON, to become inactive because Senator de Leon was 
not receiving sufficient "help" in return for his backing 
Bill $ 1 . 

Bill #2 

d. - On March 15, 2012, Senator Ted Lieu introduced a 
piece of legislation ("Bill #2"). Bill #2 would have repealed 
Section 5318 of the Labor Code, thus eliminating separate 
reimbursement for implantable devices. It is not certain why 
Senator Lieu introduced Bill #2, but I have learned that one of 
Senator Lieu's committees had requested a study that showed that 
spinal implant pass-through payments had topped $67 million in 
2010 and were up 22 percent from 2008. According to SA 
if Bill #2 were enacted, it would have disrupted DROBOT's health 
care fraud scheme , 



22 According to the website www.leginfo.ca.gov, Bill #1 was 
never passed or enacted and remains in an inactive status. 



e , if if if i " | j | 

j^" kjj RONALD CALDERON and THOMAS CALDERON went with DROBOT to 

Senator Lieu's office and put enough pressure on Senator Lieu 
that he dropped his sponsorship of Bill #2. On August 31, 2012, 
Bill #2 was placed in an inactive status at the request of then 
Assembly Member Charles Calderon, RONALD CALDERON' s oldest 
brother . 

Bill #3 



>n, RC 



f . On August 24, 2012, Senator de Leon took over 

authorship of another piece of legislation ("Bill #3"), which 

Senator Lieu had originally introduced in the Senate. When 

Senator de Leon took over authorship of Bill #3, he added 

language calling for the repeal of separate reimbursement for 

implantable devices used during spinal surgery. Unlike Bill #2 

however, Bill #3 did not immediately eliminate separate 

reimbursement for implantable devices. Instead, Bill #3 

provided, in pertinent part, as follows: 

On or before July 1, 2013, the administrative director 
shall adopt a regulation specifying an additional 
reimbursement for MS-DRGs Medicare Severity Diagnostic 
Related Groups (MS-DRGs ) 02 8, 029, 03 0, 4 53, 4 54, 455, 
and 456 to ensure that the aggregate reimbursement is 
sufficient to cover costs, including the implantable 
medical device , hardware , and instrumentation . This 
regulation shall be repealed as of January 1, 2014, 
unless extended by the administrative director. 

As a result, Bill #3 allowed DROBOT and others to continue 

seeking separate reimbursement for the cost of implantable 



- 92 - 



medical devices through December 31, 2013, by requiring the 
administrative director, who was responsible for paying 
reimbursements for those devices, to adopt regulations providing 
for such separate reimbursements that would be in force through 
December 31, 2013, 

g. On August 31, 2012, Bill #3 passed in both houses 
of the California Legislature by overwhelming majorities. It 
took effect on January 1, 2013. RONALD CALDERON was one of the 
few Senators to vote against the measure. As discussed in 
subsection v below, however, RONALD CALDERON has told the UC 
that he and THOMAS CALDERON helped get in to Bill #3 the 
language that was more favorable to DROBOT, 



iv. RONALD CALDERON 7 s Statements Relating to the 
Legislation 



i5lation 
ber 5, '2012, w 



13 3. On December 5, '2 012, when explaining to the UC why he 
should make a $5,000 or $10,000 donation towards Senator de 
Leon's Manny Paquiao fundraiser in Las Vegas, see supra f 93, 
109, RONALD CALDERON used one of THOMAS CALDERON' S clients 
(DROBOT) as an example, making the following statements: 

a. RONALD CALDERON told the UC that 80% of the 
client's business was in spinal implants and that every single 
year there had been some kind of legislation to reduce the rates 
for the spinal surgery. RONALD CALDERON told the UC that THOMAS 
CALDERON was trying to get an exception in the legislation by 



- 93 - 



working with the Director of Labor Relations, and that THOMAS 
CALDERON eventually got Senator de Leon involved in trying to 
get an exception in the legislation. RONALD CALDERON said that 
Senator de Leon had a relationship with labor and labor was 
strongly opposed to any exceptions, but that despite this 
Senator de Leon initially agreed to do the language for the 
legislation. (Based on my knowledge of this investigation and 
my research relating to the legislation discussed in subsection 
ii above, I believe that these statements relate to Senator de 
Leon's initial agreement to support Bill #1.) 



legislation to Senator Lieu. According to RONALD CALDERON, what 



I haven't seen any help." (Based on my knowledge of this 
investigation and my research relating to the legislation 
discussed in subsection ii above, I believe that these 
statements relate to Senator de Leon's decision to drop his 
support of Bill #1, and the subsequent introduction by Senator 
Lieu of Bill #2.) Given the context of this conversation 
(whether the UC should make a political contribution to Senator 
de Leon) and my training and experience, I believe that what 
RONALD CALDERON was conveying to the UC was that Senator de Leon 





94 - 



dropped his support of the legislation (Bill #1) because he had 
not received any money ( i.e. , "help") . 

c, RONALD CALDERON told the UC that Senator de Leon 
would "freak out" if he were involved in the sort of 
conversations RONALD CALDERON and the UC had with one another. 
Based on my training and experience, I know that bribes and 
discussions regarding bribe payments in exchange for official 
action are usually conducted through middlemen or individuals 
with whom you have long-standing relationships built on trust. 
Therefore, I believe that what RONALD CALDERON was conveying to 
the UC by this statement was that Senator de Leon would "freak 
out" if he knew RONALD CALDERON was telling the UC that Senator 
de Leon had asked for money in connection with supporting Bill 



#1. 



2 18, 2012, R 



d. On June 18, 2012, RONALD CALDERON sent an email to 
DROBOT saying, "Hi Mike! Thanks again for the ride up and 
lunch! So this is a reminder for you to arrange ... to divide 
pay into 2 payments. First one due July 19th and second one due 
August 16th which will be his last day of work. Thanks." That 
same day, RONALD CALDERON sent DROBOT another email saying, 
"Mike. Just in case you forgot or didn't know the total amount 
is 10k." Ten days later, on June 28, 2012, RONALD CALDERON sent 
DROBOT an email saying, "Reminder" and forwarded the initial 
email . 



- 95 - 



e. The following day, on or about June 29, 2 012, 
RONALD CALDERON told the UC that his son, Zachary Calderon, was 
working for RONALD CALDERON' s friend, who owned a hospital in 
Long Beach, California. On or about November 2, 2012, RONALD 
CALDERON clarified this further and told the UC that Zachary 
Calderon worked for his friend, who owned several surgery 
centers in Long Beach, and made $10,000 each summer. 

f. FBI Analyst pgS, \ ^fe^ has examined the bank 
account records for RONALD CALDERON and his wife, Ana Calderon. 
According to between 2011 and 2012, RONALD CALDERON 
and his wife deposited four checks from two companies known to 
be affiliated with DROBOT into their joint bank account. All of 



the checks were payable to Zachary (or "Zachery") Calderon and 
totaled approximately $18,000. 



st check, 



g. The first check, which was deposited on July 27, 
2011, was from International Implants LLC and was in the amount 
of $5,000. The second check, which was deposited on August 29, 
2011, was also from International Implants LLC and was also in 
the amount of $5,000. The third check, which was deposited on 
August 1, 2 012, was from First Medical Management and was in the 
amount of $1,490.95. The fourth check, which was deposited on 
August 14, 2012,' was also from First Medical Management and was 
in the amount of $7,018.10. 

h. On or about February 21, 2013, IRS SA ttamg j 



I ^MWWj^ reviewed Zachary Calderon' s individual tax returns for 
the 2010 and 2011 tax years. According to S A |^HH|||Q during 
both tax years Zachary Calderon claimed $10,000 in business 
receipts and the IRS received 1099s for that amount from 
International Implants LLC. On both tax returns, Zachary 
Calderon listed "research" as his principal 
business/profession/services. In tax year 2010, Zachary 
Calderon deducted $6,826 in business expenses and only reported 
$3 , 174 in income . The business expenses included, among others , 
$1,265 in "supplies," $240 in "utilities" and $1,821 in "office 



expense." In tax year 2011, Zachary Calderon deducted $6,805 in 
business expenses and only reported $3,195 in income. The 
business expenses included, among others, $1,420 in "supplies," 
$280 in "utilities" and $1,768 in "office expense." The 
business address listed on both tax returns was 908 North 2nd 
Street, Montebello, California, which I know to be RONALD 
CALDERON' s and Zachary Calderon' s personal residence. I believe 
based on my training and experience and knowledge of this 
investigation that RONALD CALDERON' s son Zachary Calderon 
received an inflated salary from DROBOT for work he may or may 
not have actually performed over the summer and, in exchange for 
those payments, RONALD CALDERON took official action that would 
delay or limit changes in California's workers' compensation 
laws relating to DROBOT' s health care fraud scheme, particularly 



- 97 - 



the amount of money medical care providers are reimbursed for 
performing spinal surgeries. Although Zachary Calderon reported 
the money he received from DROBOT on his personal tax returns, 
he did so in a way that made the payments appear to be 
legitimate and to minimize the amount of taxes that would be 
paid on the bribe. 

i. On August 21, 2012, RONALD CALDERON sent an email 



to Senator Steinberg saying, "Darrell. Rumor has it that there 
is a deal and the language will be placed in Ted [Lieu's] bill 
tomorrow. I though [t] u told us the chamber flew it up . fc g HB gHl 




j. On November 2, 2012, RONALD CALDERON met with the 



UC at his apartment in downtown Los Angeles and said the 

following with respect to the spinal surgery legislation and his 

friend who owns a hospital in Long Beach: 

We've been keeping him in business now for the last 
four years, because the governor kept pushing these 
regs to cut the funding on these spinal surgeries for 
workers' comp. All we've been trying to do is hold 
off that cut so they continue paying for that. The 



- 98 - 



way it is now, they are leaving it up to the 
administrator at workers' comp to decide how much they 
pay for these implants and if they get cut out of that 
they are out of business. So that's what we've been 
working the last four or five years . You know. . .we've 
kept them going. We've pushed it off, pushed it off, 
pushed it off... (emphasis added.) 

134. On April 30, 2013, RONALD CALDERON spoke with Zachary 
Calderon over the telephone regarding the likelihood of Zachary 
Calderon's continued employment with DROBOT's company for the 
upcoming summer. The conversation came after FBI agents 
executed search warrants at locations related to DROBOT's health 
care fraud scheme on April 4, 2013 and April 5, 2013, which 



conversation, RONALD CALDERON indicated to Zachary Calderon that 



RONALD CALDERON 




During the 




summer job? 



RC: 



Nah I haven't heard from him. I mean I've heard from 
him but I don't think he's talked to Mike [Drobot] . 



ZC: 



Oh, ok* 



RC: 



I wouldn't worry. I mean the businesses are still 
running. They still need people there, so nothing's 
changed . 



ZC: 



And they probably won't be able to offer as much 
though . 



RC: 



Oh, yeah. All they're doing is investigating 
records. . .computer records. 



ZC: 



Oh, ok, 



- 99 - 



RC: Cause there's some allegation by some disgruntled 

doctor, a surgeon, who said he was bribing physicians 
and what do you call it. . .kickback money to 
physicians. Mike doesn't do that. He doesn't work 
that way. But he's made a lot of money, so you know 
they gotta check it out. 

ZC: Ah, got it. 



v. DROBOT's Statements Relating to the 
Legislation 




23 According to one newspaper, THOMAS CALDERON's financial 
reports indicated that up until December 31, 2011, he had pulled 
in more than $152,000 in campaign contributions and accumulated 
nearly $31,300 in campaign expenses. The bulk of these early 
contributions came from political committees and healthcare 
corporations, including "$27,300 from administrators at Pacific 
Hospital of Long Beach alone." See "Marquez Faces Crowded Field 
In Assembly Race" The Downey Patriot (March 15, 2012) . 



- 100 *» 



24 On February 8, 2011, Lisa Middleton, retired former Vice 
President of Internal Investigations of the State Compensation 
Insurance Fund (SCIF) , was interviewed by FB I SAf ^ w fi ^B ^ and 
California Department of Insurance Detective ^^^^ s ^^ l ^ ] [' : ^^^ ' 

Middleton advised that between 2002 and early 2004, DROBOT and 
THOMAS CALDERON were part of negotiations between the SCIF and 
DROBOT' S various business entities including Healthsmart 
Pacific, Inc., and Pacific Hospital of Long Beach, CA for monies 
DROBOT believed were owed to his companies from SCIF for unpaid 
liens. DROBOT brought THOMAS CALDERON into the negotiations as 
his consultant. Middleton advised that during the negotiation 
process she never met THOMAS CALDERON f ace -to- face . However, 
THOMAS CALDERON' S name was specifically mentioned to Middleton 
as the source of several queries. SCIF settled with DROBOT in 
early 2004 for $27.5 million. Middleton said DROBOT once told 
her, "Of course I'm milking the system," According to 
subpoenaed bank records for THOMAS CALDERON' s company, the 
Calderon Group, Inc., on July 28, 2004, it received a check from 
West Coast Surgery Center Management, LLC, a company known to be 
affiliated with DROBOT, for $1 million dollars. In the memo 
section of the check were typed the words "SCIF Settlement." 



- 101 * 




- 102 - 




- 104 * 




- 105 - 



BACKGROUND REGARDING THE SUBJECT PREMISES 



145 . 




- 106 - 



■ 

VII. SEARCH AND SEIZURE OF COMPUTER/ELECTRONIC/DIGITAL DATA 
A. TRAINING AND EXPERIENCE 

146. This application seeks permission to search for and 




seize evidence (and contraband) of the crimes described above 
stored on computers and electronic/digital devices 
(collectively, "digital devices"), as well as any digital 



devices that constitute (fruits and) instrumentalities of the 
crimes . 



147. I have spoken with SA | who has training 
in the forensic examination of computers and digital devices. 
SA |[^izzrf| related various information to me and/or confirmed 
various information for me as noted below. 

148. Based upon my training and experience, and 
information related to me by agents and others involved in the 
forensic examination of computers and digital devices including 
SA ^ffffiigj I know that data in digital form can be stored on a 
variety of systems, storage devices, or media including hard 



107 - 



disk drives, floppy disks, compact disks, magnetic tapes, flash 
drives, and memory chips. Some of these devices can be smaller 
than a thumbnail and can take several forms, including thumb 
drives, secure digital media used in phones and cameras, 
personal music devices, and similar items. 

14 9. Based upon my training and experience, and the 
investigation to date, I believe that computer (s) and digital 
device (s) will be found at the premises. 

150. Based upon my training and experience, and 
information related to me by agents and others involved in the 
forensic examination of computers and digital devices including 
SA fr» ■ 'i gj I know that computers and digital devices are often 
used to store information, very much the same way paper, 
ledgers, files and file cabinets are used to store information. 
I know that it is common today for businesses to utilize 
computers to conduct their business and to store information 
related thereto. I also know that it is common for individuals 
to have personal computers and to use these computers to conduct 
their personal affairs, their business affairs, and to store 

m 

information related thereto. I know based on my training and 
experience, including prior investigations specifically related 
to the investigation of public corruption and bribery, that 
subjects who are engaged in corruption commonly store 



-= 108 - 



information related to their activities on computers and digital 
devices . 

151. In addition, there are a number of indicia that the 
SUBJECT PREMISES has computer (s) and/or digital devices at the 




B. REMOVAL OF DATA STORAGE DEVICES FOR REVIEW IN A 
LABORATORY SETTING MAY BE REQUIRED 

152. Based upon my training and experience, and 

information related to me by agents and others involved in the 

forensic examination of computers and digital devices including 

SA p4^8Sgj [ I know that a forensic image is an exact physical 

copy of a data storage device. A forensic image captures all 

data on the subject media without viewing or changing the data 

in any way. Absent unusual circumstances, it is essential that. 

a forensic image be obtained prior to conducting any search of 

data for information subject to seizure pursuant to the warrant. 

I also know that during the search of the premises it is not 

always possible to create a forensic image of or search digital 



* 109 - 



devices or media for data. I also know that it is frequently- 
necessary to remove digital devices or media for later 
laboratory evaluation off -site under controlled circumstances. 
This is true for a number of reasons, including the following: 

a. Searching digital devices can be a highly 
technical process that requires specific expertise and 
specialized equipment. Because there are so many different 
types of digital devices and software in use today, it is 
difficult to anticipate all of the necessary technical manuals, 
specialized equipment, and specific expertise necessary to 
conduct a thorough search of the media to ensure that the data 
will be preserved and evaluated in a useful manner. 

b. Searching digital devices can require the use of 
precise, scientific procedures designed to maintain the 
integrity of the evidence. The recovery of such data may 
require the use of special software and procedures, such as 
those used in a law enforcement laboratory. 

c. The volume of data stored on many digital devices 
is typically so large that it will be highly impractical to 
search for data during the execution of the physical search of 
the premises.' Storage devices capable of storing 500 gigabytes 
of data are now commonplace in desktop computers. It can take 
several hours, or even days, to image a single hard drive. The 
larger the drive, the longer it takes. Depending upon the 



- 110 - 



number and size of the devices, the length of time that agents 
must remain onsite to image and examine digital devices can 
become impractical , 

d. Since digital data may be vulnerable to 
inadvertent modification or destruction, a controlled 
environment, such as a law enforcement laboratory, may be 
essential to conduct a complete and accurate analysis of the 
digital devices from which the data will be extracted. Software 
used in a laboratory setting can often reveal the true nature of 
data. Moreover, a computer forensic reviewer needs a 
substantial amount of time to extract and sort through data that 
is concealed or encrypted to determine whether it is evidence, 
contraband, or an instrumentality of a crime. 

e. Analyzing the contents of a computer or other 
electronic storage device, even without significant technical 
difficulties, can be very challenging, and a variety of search 
and analytical methods must be used. For example, searching by 
keywords, which is a limited text based search, often yields 
thousands of hits, each of which must be reviewed in its context 
by the examiner to determine whether the data is within the 
scope of the warrant. Merely finding a relevant hit does not 
end the review process. The computer may have stored 
information about the data at issue which may not be searchable 
text, such as: who created it; when and how it was created, 



- Ill - 



downloaded, or copied; when it was last accessed; when it was 
last modified; when it was last printed; and when it was 
deleted. The relevance of this kind of data is often 
contextual. Furthermore, many common email, database, and 
spreadsheet applications do not store data as searchable text, 
thereby necessitating additional search procedures. To 
determine who created, modified, copied, downloaded, 
transferred, communicated about, deleted, or printed data 
requires a search of events that occurred on the computer in the 
time periods surrounding activity regarding the relevant data. 
Information about which users logged in, whether users shared 
passwords, whether a computer was connected to other computers 
or networks, and whether the users accessed or used other 
programs or services in the relevant time period, can help 
determine who was sitting at the keyboard. 

f. Searching digital devices can require the use of 
precise, scientific procedures designed to recover latent data. 
The recovery of such data may require the use of special 
software and procedures. Data that represents electronic files 
or remnants of such files can be recovered months or even years 
after it has been downloaded onto a hard drive, deleted, or 
viewed via the Internet. Even when such files have been 
deleted, data can be recovered months or years later using 
readily available forensic tools. Normally, when a person 



deletes a file on a computer, the data contained in the file 
does not actually disappear; rather, that data remains on the 
hard drive until it is overwritten by new data. Therefore, 
deleted files, or remnants of deleted files, may reside in space 
on the hard drive or other storage media that is not allocated 
to an active file. In addition, a computer's operating system 
may keep a record of deleted data in a swap or recovery file or 
in a program specifically designed to restore the computer's 
settings in the event of a system failure. 

153. This warrant seeks authority to seize contextual 
data, that is, evidence of how a digital device has been used, 
what it has been used for and who has used it. It can be very 
important in criminal cases to seek "attribution" data so that 
an event or communication can be associated with a person. 
Based upon my training and experience, and information related 
to me by agents and others involved in the forensic examination 
of computers and digital devices including SA ^jmrnmrntfi this 
authority is sought for a number of reasons: 

a . In some instances , the computer "writes" to 
storage media without the specific knowledge or permission of 
the user. Generally, data or files that have been received via 
the Internet are automatically downloaded into a temporary 
Internet directory or cache. The browser typically maintains a 
fixed amount of hard drive space devoted to such data or files, 

- 113 - 



and the files are only overwritten as they are replaced with 
more recently viewed Internet pages. Thus, the ability to 
retrieve artifacts of electronic activity from a hard drive 
depends less on when the file was downloaded or viewed than on a 
particular user's operating system, storage capacity, and 
computer usage. Logs of access to websites, file 
management/transfer programs, firewall permissions, and other 
data assist the examiner and investigators in creating a 
"picture" of what the computer was doing and how it was being 
used during the relevant time in question. Given the 



rant tn 
: the d< 



interrelationships of the data to various parts of the 
computer's operation, this information cannot be easily 



segregated. 



b. Digital data on the hard drive that is not 
:iated wit 



currently associated with any file may reveal evidence of a file 
that was once on the hard drive but has since been deleted or 
edited, or it could reveal a deleted portion of a file (such as 
a paragraph that has been deleted from a word processing file) . 
Virtual memory paging systems can leave digital data on the hard 
drive that show what tasks and processes on the computer were 
recently used. Web browsers, email programs, and chat programs 
store configuration data on the hard drive that can reveal 
information such as online nicknames and passwords. Operating 
systems can record additional data, such as the attachment of 



114 



peripherals, the attachment of USB flash storage devices, and 
times the computer was in use. Computer file systems can record 
data about the dates files were created and the sequence in 
which they were created. This data can be evidence of a crime, 
can indicate the identity of the user of the digital device, or 
can point toward the existence of evidence in other locations 
(or on other devices) . 

c. Further, evidence of how a digital device has 
been used, what it has been used for, and who has used it, may 
be learned from the absence of particular data on a digital 
device. Specifically, the lack of computer security software, 
virus protection, malicious software, evidence of remote control 
by another computer system, or other programs or software may 
assist in identifying the user indirectly and may provide 
evidence excluding other causes for the presence or absence of 
the items sought by this application. Additionally, since 
computer drives may store artifacts from the installation of 
software that is no longer active , evidence of the historical 
presence of the kind of software and data described may have 
special significance in establishing timelines of usage, 
confirming the identification of certain users, establishing a 
point of reference for usage and, in some cases, assisting in 
the identification of certain users. This data can be evidence 
of a crime, can indicate the identity of the user of the digital 



device, or can point toward the existence of evidence in other 
locations. Evidence of the absence of particular data on the 
drive is not generally capable of being segregated from the rest 
of the data on the drive. 
C. SEARCH PROCEDURE 

154. In searching for data capable of being read, stored, 
or interpreted by a computer or storage device, law enforcement 
personnel executing the search warrant will employ the following 
procedure : 

a. On site search, if practicable. Law enforcement 
officers trained in computer forensics (hereafter, "computer 
personnel"), if present, may be able to determine if digital 



devices can be searched on site in a reasonable amount of time 
and without jeopardizing the ability to preserve data on the 



-zing the a 
such a sea 



devices and conduct such a search if deemed practicable. Any 
device searched on site will be seized if it contains any data 
falling within the list of items to be seized as set forth in 
the warrant and in Attachment B. 

b. On site imaging, if practicable. If a digital 
device cannot be searched on site as described above, the 
computer personnel, if present, will determine whether the 
device can be imaged on site in a reasonable amount of time 
without jeopardizing the ability to preserve the data and 
conduct such imaging if deemed practicable. 



c. Seizure of digital devices for off -site imaging 
and search. If no computer personnel are present at the 
execution of the search warrant, or if they determine that a 
digital device cannot be searched or imaged on site in a 
reasonable amount of time and without jeopardizing the ability 
to preserve data, the digital device will be seized and 
transported to an appropriate law enforcement laboratory for 



review. 



d. Law enforcement personnel (potentially including, 
but not necessarily limited to, computer personnel) will examine 



the digital device to determine if it contains any data that 
falls within the list of items to be seized as set forth in the 
warrant and m Attachment B. 

e. Law enforcement personnel will use procedures 
designed to identify items to be seized under the warrant. 
These procedures may include, without limitation, the use of a 
"hash value" library to exclude normal operating system files 
that do not need to be searched. In addition, law enforcement 
personnel may search for and attempt to recover deleted, hidden, 
or encrypted data to determine whether the data falls within the 
list of items to be seized under the warrant. 

f. If the original digital device was seized, law 
enforcement personnel will perform an initial search of the 
original digital device within a reasonable amount of time not 



to exceed 120 days from the date of execution of the warrant. 
If, after conducting the initial search, law enforcement 
personnel determine that an original digital device contains any 
data falling within the list of items to be seized pursuant to 
this warrant , the government will retain the original digital 
device to, among other things, litigate the 

admissibility/authenticity of the seized items at trial, ensure- 
the integrity of the copies, ensure the adequacy of chain of 
custody, and resolve any issues that potentially might be raised 
regarding changed conditions of the evidence. If the government 




needs additional time to determine whether an original digital 
device contains any data falling within the list of items to be 
seized pursuant to this warrant, it may seek an extension of the 
time period from the Court within the original 12 -day period 



Court within t: 
:ution of the w« 



from the date of execu 



g. If an original digital device does not contain 
any data falling within the list of items to be seized pursuant 
to this warrant , the government will : return that original 
digital device to its owner within a reasonable period of time, 
if it can be lawfully possessed; seal any image previously made 
of the device; and not review the sealed image absent further 
authorization from the Court. 



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D. DATA TO BE SEIZED 

155. Based upon my training and experience, and 
information related to me by agents and others involved in the 
forensic examination of computers and digital devices, I know 
that, in order to search for data that is capable of being read 
or interpreted by a computer, law enforcement personnel will 
need to seize, image, copy, and/or search the following items, 
subject to the procedures set forth herein: 

a. Any computer equipment or digital devices that 
are capable of being used to commit or further the crimes 
outlined above , or to create , access , or store (evidence , 
contraband, fruits, or instrumentalities) of such crimes, as set 
forth in Attachment B; 

b. Any computer equipment or digital devices used to 
facilitate the transmission, creation, display, encoding, or 
storage of data, including word processing equipment, modems, 
docking stations , monitors , printers , plotters , encryption 
devices, and optical scanners that are capable of being used to 
commit or further the crimes outlined above , or to create , 
access, process, or store (evidence, contraband, fruits, or 
instrumentalities) of such crimes, as set forth in Attachment B; 

c. Any magnetic, electronic, or optical storage 
device capable of storing data, such as floppy disks, hard 
disks, tapes, CD ROMs, CD Rs, CD RWs, DVDs, optical disks, 

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printer or memory buffers, smart cards, PC cards, memory- 
calculators, electronic dialers, electronic notebooks, personal 
digital assistants, and cell phones capable of being used to 
commit or further the crimes outlined above, or to create, 
access, or store (evidence, contraband, fruits, or 
instrumentalities) of such crimes, as set forth in Attachment B; 

d. Any documentation, operating logs, and reference 
manuals regarding the operation of the computer equipment, 
storage devices, or software; 



e. Any applications, utility programs, compilers, 
interpreters, and other software used to facilitate direct or 
indirect communication with the computer hardware, storage 
devices, or data to be searched; 

f . Any physical keys, encryption devices, dongles, 
or similar physical items which are necessary to gain access to 
the computer equipment, storage devices, or data; 

g. Any passwords, password files, test keys, 
encryption codes, or other information necessary to access the 
computer equipment, storage devices, or data; and 

h . All records , documents , programs , applications , 

or materials created, modified, or stored in any form, including 
in digital form, on any computer or digital device, that show 
the actual user(s) of the computers or digital devices during 
any time period in which the device was used to commit the 



crimes referenced above, including the web browser's history; 
temporary Internet files; cookies, bookmarked, or favorite web 
pages; email addresses used from the computer; MAC IDs and/or 
Internet Protocol addresses used by the computer; email, instant 
messages, and other electronic communications; address books; 
contact lists; records of social networking and online service 
usage; and software that would allow others to control the 
digital device such as viruses, Trojan horses, and other forms 
of malicious software (or alternatively, the lack of software 
that would allow others to control the digital device) . 

i , All records , documents , programs , applications , 
or materials created, modified, or stored in any form, including 
in digital form, on any computer or digital device, that show 
evidence of counter- forensic programs (and associated data) that 



■ 

are designed to eliminate data from the computer or digital 
device . 

j . All records , documents , programs , applications , 
or materials created, modified, or stored in any form, including 
in digital form, on any computer or digital device, that show 
contextual information necessary to understand the evidence, 
contraband, fruits, or instrumentalities described in this 
attachment . 



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E. RETENTION OF IMAGE 

156. The government will retain a forensic image of each 
digital device subjected to analysis for a number of reasons, 
including proving the authenticity of evidence to be used at 
trial; responding to any potential questions regarding the 
corruption of data; establishing the chain of custody of data; 
refuting any potential claims of fabrication, tampering, or 
destruction with/of data; and addressing potential exculpatory 




evidence claims where , for example , a defendant claims that the 
government avoided its obligations by destroying data or 
returning it to a third party. 
F. INVENTORY AND RETURN 

157. With respect to the seizure of electronic storage 
media or the seizure or imaging of electronically stored 
information, the search warrant return to the Court will 
describe the physical storage media that were seized or imaged. 
Prior Efforts to Obtain Evidence 

158. The government has made prior efforts in other 
judicial fora to obtain evidence possibly covered in the 
requested warrant. See supra flf 8-11. 



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VIII. REQUEST FOR SEALING 

159. The government's investigation of RONALD CALDERON and 
the bribery schemes set forth above is still ongoing. If this 
affidavit is filed publicly, there would be the obvious risk 
that RONALD CALDERON or other individuals referenced in the 
search warrant would learn of its existence and attempt to 
destroy evidence of criminal activity before the warrant could 
be executed and that persons identified as being under suspicion 
of criminal activity might destroy evidence, coordinate their 
stories before being interviewed by law enforcement or called to 




testify, or might even flee the jurisdiction. Accordingly, I 
request that this affidavit be filed and kept under seal until 
further order of the Court. The government requests that the 
Court's order not limit its ability to provide copies of the 



ait 
it 



Court's search warrant authorization at the time the warrant is 
executed as required by Federal Rule of Criminal Procedure 
41(f). I further request that the Court's order not limit my 
ability to provide copies of the affidavit to other law 
enforcement officers and attorneys assisting with this 
investigation. 



*- 123 * 



IX. CONCLUSION 

160. Based on the foregoing, I believe there is probable 
cause to believe that RONALD CALDERON has committed the Subject 
Offenses and that the SUBJECT PREMISES will contain evidence, 
contraband, fruits , or instrumentalities of those crimes . 




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